Rhode Island Unemployment Compensation laws & HR compliance analysis

Rhode Island Unemployment Compensation: What you need to know

Virtually all employers are subject to unemployment insurance taxes under Rhode Island's Employment Security Act (RI Gen. Laws Sec. 28-42-1 et seq.). Coverage extends to:
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• Any employer that employs one or more persons for any part of a day within any calendar year;
• Any employer subject to the Federal Unemployment Tax Act (FUTA); and
• Any employer of a domestic worker that pays $1,000 or more in a calendar quarter (RI Gen. Laws Sec. 28-42-3).
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 the service is performed for a corporation or by industrial and debit insurance agents);
• Casual laborers (unless the service is provided for a corporation);
• Part-time workers for nonprofit entities; and
• Caddies (unless the service is provided solely for a club) (RI Gen. Laws Sec. 28-42-8).
Taxable wage base. The taxable wage base is tied to the average annual wage. For the current taxable wage base, visit http://www.uitax.ri.gov or http://www.dlt.ri.gov/lmi/news/quickref.htm.The term “wages” includes:
• The reasonable value of any noncash remuneration, such as board, rent, housing, and lodging;
• Commissions and bonuses;
• Vacation pay; and
• Reported tips (RI Gen. Laws Sec. 28-42-3).
Rates. To find the current tax rate, visit http://www.dlt.ri.gov/lmi/news/quickref.htm. New employers pay a certain set percentage.
Experience rating. After a new employer period, an employer receives an “experience rating” that determines its tax rate for the coming year. The rating is calculated on the basis ...

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