Minnesota Unemployment Compensation laws & HR compliance analysis

Minnesota Unemployment Compensation: What you need to know

Virtually all employers are subject to unemployment insurance taxes under the Minnesota Unemployment Insurance Law(MN Stat. Sec. 268.001 et seq.). Under the law, the term “employer” means any person that has had one or more employees during the current or the prior calendar year, including any person that has elected to be subject to the law and a joint venture composed of one or more employers (MN Stat. Sec. 268.035).
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Additionally, certain employee leasing companies, professional employer organizations, or similar entities that have been assigned applicable tax accounts may also be considered employers under the law.
The law excludes certain services from coverage, including, for example, services provided by:
• Students working for schools, colleges, or universities;
• Students working for work-study programs;
• Real estate and insurance salespersons (unless performed by a corporate officer);
• Student nurses;
• Hospital interns;
• Certain newspaper distributors (e.g., minors);
• Casual laborers; and
• Employees of churches or associations of churches or other organizations operated exclusively for religious purposes (MN Stat. Sec. 268.035).
Taxable wage base. The taxable wage base is determined each year. For the current taxable wage base, visit http://www.uimn.org/uimn/employers/wages-taxes/tax-rates/2016_tax_rate_factors.jsp. The term "wages" generally includes the following:
• Commissions, bonuses, and prizes;
• The reasonable value of noncash remuneration, such as board and lodging;
• Vacation and holiday pay;
• Reported tips and gratuities; and
• Severance payments (MN Stat. Sec. 268.035).
Rates. Tax rates vary from year to year. To find the current tax rate, visit http://www.uimn.org/uimn/employers/wages-taxes/tax-rates/2016_tax_rate_factors.jsp

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