Transfers of Business and Your Contribution Rate
If you acquire all or a portion of an existing business, you also acquire all or a portion of the previous employer's unemployment insurance experience rating account balance and other aspects of that employer's unemployment experience. In addition, charges for benefit payments to former employees of the business or part of the business that you acquired will be used in computing your future contribution rate.
A transfer of business takes place when another employer transfers or sells all or part of a business to you and any one of the following conditions exists:
- You assume any of the transferring employer's obligations;
- You acquire any of the transferring employer's goodwill;
- You continue or resume the business of the transferring employer, either in the same establishment or elsewhere;
- You continue to employ substantially the same employees who worked in the transferred part of the business.
If you acquire the entire business, the transferring employer's account is closed and its experience is transferred into your account. Your contribution rate is then determined or redetermined as of the date of the transfer. You will receive a Notice of Experience Rating Charges reflecting benefits paid to former employees of the transferring employer that are being charged to the account. If you acquire only a portion of a business, information is obtained from the transferring employer to determine the percentage of the experience to transfer into your account.
Employers must pay Unemployment Insurance contributions on the first $8,500 an individual employee earns during the calendar year. If you acquire all, or part of another employer's business, you may include the wages paid by the former employer in determining the first $8,500 paid to each employee.
Notification to the Department of a transfer must be made by the end of the year following the calendar year in which the transfer occurred; however, employers are encouraged to provide this notification as soon as possible so that any questions of concerns maybe quickly resolved. Since the acquisition of a business may affect your contribution rate, you may wish to be aware of the experience rating of the seller.
If you have any questions regarding the transfer of business, call our Liability and Determination Section at (518) 457-2635.
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