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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 (UI) experience rating account balance and other aspects of that employer's UI 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 exist:

  • 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 UI contributions on the amount each employee earns during the calendar year, up to the UI wage base amount.  On January 1, 2014 several provisions of the recent UI reform legislation go into effect.  These provisions affect the UI wage base.  The UI wage base will adjust January 1 of each year as follows:

Year 2013 and prior   $8,500
Year 2014                   $10,300
Year 2015                   $10,500
Year 2016                   $10,700
Year 2017                   $10,900
Year 2018                   $11,100
Year 2019                   $11,400
Year 2020                   $11,600
Year 2021                   $11,800
Year 2022                   $12,000
Year 2023                   $12,300
Year 2024                   $12,500
Year 2025                   $12,800
Year 2026                   $13,000

After 2026, the wage base will adjust on January 1 of each year to 16% of the state's average annual wage rounded up to the nearest $100.  The state's average annual wage is established no later than May 31 of each year.  The annual average wage cannot be reduced from the prior year's level.

If you acquire all or part of another employer's business, you may include the wages already paid by the former employer during that calendar year to each employee in the transferred portion of the business when determining the wage base for 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 or concerns may be 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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