State Codes and Statutes

State Codes and Statutes

Statutes > Nebraska > Chapter48 > 48-649

48-649. Combined tax rate; how computed.The commissioner shall, for each calendar year, determine the combinedtax rate applicable to each employer on the basis of his or her actual experiencein the payment of contributions and with respect to benefits charged againsthis or her separate experience account, in accordance with the following requirements:(1) The commissioner shall, by December 1 of each calendar year, andbased upon information available through the department, determine the stateunemployment insurance tax rate for the following year. The state unemploymentinsurance tax rate shall be zero percent if:(a) The average balance in the State Unemployment Insurance Trust Fundat the end of any three months in the preceding calendar year is greater thanone percent of state taxable wages for the same preceding year; or(b) The balance in the State Unemployment Insurance Trust Fund equalsor exceeds thirty percent of the average month end balance of the state'saccount in the Unemployment Trust Fund for the three lowest calendar monthsin the preceding year;(2)(a) If the stateunemployment insurance tax rate is not zero percent as determined in thissection, the combined tax rate shall be divided so that not less than eightypercent of the combined tax rate equals the contribution rate and not morethan twenty percent of the combined tax rate equals the state unemploymentinsurance tax rate except for employers who are assigned a combined tax rateof five and four-tenths percent or more. For those employers, the state unemploymentinsurance tax rate shall equal zero and their combined tax rate shall equaltheir contribution rate. (b) When the state unemployment insurance tax rate is determined tobe zero percent pursuant to subdivision (1) of this section, the contributionrate for all employers shall equal one hundred percent of the combined taxrate;(3) In calendar year 2005, an employer's combined tax rate shall bethree and five-tenths percent of his or her annual payroll unless and until(a) benefits have been payable from and chargeable to his or her experienceaccount throughout the preceding one calendar year and (b) contributions havebeen payable to the fund and credited to his or her experience account withrespect to the two preceding calendar years. Subject to fair and reasonablerules and regulations of the commissioner issued with due regard for the solvencyof the fund, in calendar year 2005 the combined tax rate required of eachemployer who meets the requirements of subdivisions (a) and (b) of this subdivisionshall be based directly on his or her contributions to and benefit experienceof his or her experience account and shall be determined by the commissionerfor each calendar year at its beginning. Such rate shall not be greater thanthree and five-tenths percent of his or her annual payroll if his or her experienceaccount exhibits a positive balance as of the beginning of such calendar year,but for any employer who has been subject to the payment of contributionsfor any two preceding calendar years, regardless of whether such years areconsecutive, and whose experience account exhibits a negative balance as ofthe beginning of such calendar year, the rate shall be greater than threeand five-tenths percent of his or her annual payroll but not greater thanfive and four-tenths percent of his or her annual payroll until such timeas the experience account exhibits a positive balance, and thereafter therate shall not be greater than three and five-tenths percent of his or herannual payroll. For calendar year 2005, the standard rate shall be five andfour-tenths percent of the employer's annual payroll. As used in this subdivision,standard rate shall mean the rate from which all reduced rates are calculated;(4)(a) Effective January 1, 2006, an employer's combined tax rate (i)for employers other than employers engaged in the construction industry shallbe the lesser of the state's average combined tax rate as determined pursuantto subdivisions (4)(e), (4)(f), and (4)(g) of this section or two and five-tenthspercent and (ii) for employers in the construction industry shall be the categorytwenty rate determined pursuant to subdivisions (4)(e) and (4)(f) of thissection, unless and until:(A) Benefits have been payable from and chargeable to his or her experienceaccount throughout the preceding four calendar quarters; and(B) Wagesfor employment have been paid by the employer in each of the twopreceding four-calendar-quarter periods.For purposes of this subdivision (4)(a), employers engaged in the constructionindustry means all employers primarily engaged in business activities classifiedas sector 23 business activities under the North American Industry ClassificationSystem.(b) In no event shall the combined tax rate for employers who fail tomeet the requirements of subdivision (4)(a) of this section be less than oneand twenty-five hundredths percent.(c) For any employer who has not paid wages for employment during each of thetwo four-calendar-quarter periods ending on September 30 of any year, buthas paidwages for employment in any two four-calendar-quarter periods,regardless of whether such four-calendar-quarter periods are consecutive,such employer's combined tax rate for the following tax year shall be:(i) The highest combined tax rate for employers with a positive experienceaccount balance if the employer's experience account balance exhibits a positivebalance as of September 30 of the year of rate computation; or(ii) The standard rate if the employer's experience account exhibitsa negative balance as of September 30 of the year of rate computation.(d) Beginning with rate calculations for calendar year 2006 and eachyear thereafter, the combined tax rate for employers who meet the requirementsof subdivision (4)(a) of this section shall be calculated according to subdivisions(4)(e), (4)(f), and (4)(g) of this section and shall be based upon the employer'sexperience rating record and determined from the employer's reserve ratio,which is the percent obtained by dividing the amount by which, if any, theemployer's contributions credited from the time the employer first or mostrecently became an employer, whichever date is later, and up to and includingSeptember 30 of the year the rate computation is made, plus any part of theemployer's contributions due for that year paid on or before October 31 ofsuch year, exceed the employer's benefits charged during the same period,by the employer's average annual taxable payroll for the sixteen-consecutive-calendar-quarterperiod ending September 30 of the year in which the rate computation is made.For an employer with less than sixteen consecutive calendar quarters of contributionexperience, the employer's average taxable payroll shall be determined basedupon the four-calendar-quarter periods for which contributions are payable.(e) Each eligible experience rated employer shall be assigned to oneof twenty rate categories with a corresponding experience factor as follows:CategoryExperience Factor10.0020.2530.4040.45 50.5060.6070.6580.7090.80100.90110.95121.00131.05141.10 151.20161.35171.55181.80192.15202.60Eligible experience rated employers shall be assigned to rate categoriesfrom highest to lowest according to their experience reserve ratio with categoryone being assigned to accounts with the highest reserve ratios and categorytwenty being assigned to accounts with the lowest reserve ratios. Each categoryshall be limited to no more than five percent of the state's total taxablepayroll, except that:(i) Any employer which has a portion of its taxable wages fall intoone category and a portion into the next higher category shall be assignedto the lower category;(ii) No employer with a reserve ratio calculated to five decimal placesequal to another employer similarly calculated shall be assigned to a higherrate than the employer to which it has the equal reserve ratio; and(iii) No employer witha positive experience account balance shall be assigned to category twenty.(f) The state's reserve ratio shall be calculated by dividing the amountavailable to pay benefits in the Unemployment Trust Fund and the State UnemploymentInsurance Trust Fund as of September 30, 2005, and each September 30 thereafter,less any outstanding obligations and amounts appropriated therefrom by thestate's total wages from the four calendar quarters ending on such September30. For purposes of this section, total wages means all remuneration paidby an employer in employment. The state's reserve ratio shall be applied tothe table in this subdivision to determine the yield factor for the upcomingrate year.State's Reserve RatioYieldFactor 1.45 percent and above=0.701.30 percent up to but not including 1.45=0.751.15 percent up to but not including 1.30 =0.801.00 percent up to but not including 1.15=0.900.85 percent up to but not including 1.00=1.000.70 percent up to but not including 0.85=1.100.60 percent up to but not including 0.70 =1.200.50 percent up to but not including 0.60=1.250.45 percent up to but not including 0.50=1.300.40 percent up to but not including 0.45=1.350.35 percent up to but not including 0.40=1.400.30 percent up to but not including 0.35=1.45Below 0.30 percent=1.50Once the yield factor for the upcoming rate year has been determined,it is multiplied by the amount of unemployment benefits paid from combinedtax during the four calendar quarters ending September 30 of the precedingyear. The resulting figure is the planned yield for the rate year. The plannedyield is divided by the total taxable wages for the four calendar quartersending September 30 of the previous year and carried to four decimal placesto create the average combined tax rate for the rate year.(g) The average combined tax rate is assigned to rate category twelveas established in subdivision (4)(e) of this section. Rates for each of theremaining nineteen categories are determined by multiplying the average combinedtax rate by the experience factor associated with each category and carriedto four decimal places. Employers who are delinquent in filing their combinedtax reports as of October 31 of any year shall be assigned to category twentyfor the following calendar year unless the delinquency is corrected priorto December 31 of the year of rate calculation.(h) As used in this subdivision (4) of this section, standard rate meansthe rate assigned to category twenty for that year. For calendar years 2006and thereafter, the standard rate shall be not less than five and four-tenthspercent of the employer's annual taxable payroll;(5) Any employer may at any time make voluntary contributions up tothe amount necessary to qualify for one rate category reduction, additionalto the required contributions, to the fund to be credited to his or her account.Voluntary contributions received after March 10, 2005, for rate year 2005or January 10 for rate year 2006 and thereafter shall not be used in ratecalculations for the same calendar year;(6) As used in sections 48-648 to 48-654, the term payroll means thetotal amount of wages during a calendar year, except as otherwise providedin section 48-654, by which the combined tax was measured; and(7)(a) The state or any of its instrumentalities shall make paymentsin lieu of contributions in an amount equal to the full amount of regularbenefits plus one-half of the amount of extended benefits paid during eachcalendar quarter that is attributable to service in employment of the stateor any of its instrumentalities. The commissioner after the end of each calendarquarter shall notify any state instrumentality or other public employer ofthe amount of regular benefits and one-half the amount of extended benefitspaid that are attributable to service in its employment and the instrumentalityor public employer so notified shall reimburse the fund within thirty daysafter receipt of such notice. For all tax years beginning before January1, 2010, the commissioner may require that any employer whoseannual payroll for either of the two preceding calendar years has equaledor exceeded five hundred thousand dollars to pay the reimbursement by an electronicmethod approved by the commissioner, except when the employer establishesto the satisfaction of the commissioner that payment of the reimbursementby an electronic method would work a hardship on the employer. For all tax years beginning on or afterJanuary 1, 2010, the commissioner may require any employer whose annual payrollfor either of the two preceding calendar years has equaled or exceeded onehundred thousand dollars to pay the reimbursement by an electronic methodapproved by the commissioner, except when the employer establishes to thesatisfaction of the commissioner that payment of the reimbursement by an electronicmethod would work a hardship on the employer.(b) After December 31, 1977, the state or any of its political subdivisionsand any instrumentality of one or more of the foregoing or any other governmentalentity for which services in employment as is provided by subdivision (4)(a)of section 48-604 are performed shall be required to pay contributions andafter December 31, 1996, combined tax on wages paid for services renderedin its or their employment on the same basis as any other employer who isliable for the payment of combined tax under the Employment Security Law,unless the state or any political subdivision thereof and any instrumentalityof one or more of the foregoing or any other governmental entity for whichsuch services are performed files with the commissioner its written electionnot later than January 31, 1978, or if such employer becomes subject to thissection after January 1, 1978, not later than thirty days after such subjectivitybegins, to become liable to make payments in lieu of contributions in an amountequal to the full amount of regular benefits plus one-half of the amount ofextended benefits paid during each calendar quarter that is attributable toservice in employment of such electing employer prior to December 31, 1978,and in an amount equal to the full amount of regular benefits plus the fullamount of extended benefits paid during each calendar quarter that is attributableto service in employment of such electing employer after January 1, 1979.Eligible employers electing to make payments in lieu of contributions shallnot be liable for state unemployment insurance tax payments. The commissioner,after the end of each calendar quarter, shall notify any such employer thathas so elected of the amount of benefits for which it is liable to pay pursuantto its election that have been paid that are attributable to service in itsemployment and the employer so notified shall reimburse the fund within thirtydays after receipt of such notice.(c) Any employer which makes an election in accordance with subdivision(b) of this subdivision to become liable for payments in lieu of contributionsshall continue to be liable for payments in lieu of contributions for allbenefits paid based upon wages paid for service in employment of such employerwhile such election is effective and such election shall continue until suchemployer files with the commissioner, not later than December 1 of any calendaryear, a written notice terminating its election as of December 31 of thatyear and thereafter such employer shall again be liable for the payment ofcontributions and for the reimbursement of such benefits as may be paid basedupon wages paid for services in employment of such employer while such electionwas effective. SourceLaws 1937, c. 108, § 7, p. 382; Laws 1939, c. 56, § 5, p. 239; Laws 1941, c. 94, § 5, p. 390; C.S.Supp.,1941, § 48-707; R.S.1943, § 48-649; Laws 1947, c. 175, § 10, p. 577; Laws 1949, c. 163, § 12, p. 427; Laws 1953, c. 167, § 8, p. 533; Laws 1955, c. 190, § 9, p. 548; Laws 1972, LB 1392, § 8; Laws 1976, LB 819, § 2; Laws 1977, LB 509, § 7; Laws 1984, LB 249, § 1; Laws 1985, LB 339, § 34; Laws 1994, LB 1337, § 8; Laws 1995, LB 334, § 1; Laws 2005, LB 484, § 9; Laws 2005, LB 739, § 11; Laws 2007, LB265, § 9; Laws 2009, LB631, § 7.AnnotationsUnder the Nebraska Employment Security Law, the contribution type of financing as provided by section 48-649, R.R.S.1943, and reimbursement financing under section 48-660.01, R.R.S.1943, are separate and distinct systems, and a nonprofit organization must elect to use one or the other. West Nebraska General Hospital v. Hanlon, 208 Neb. 173, 302 N.W.2d 694 (1981).