State Unemployment Tax Act (SUTA) Dumping
What is SUTA Dumping?
SUTA Dumping is an attempt to manipulate businesses to get a lower tax rate.
Who does this and how?
Employers and their representatives engage in SUTA dumping.
They do this to get a lower tax rate than their unemployment experience allows. This is illegal.
Employers who meet either of the following conditions are involved in SUTA dumping if they knowingly attempt to manipulate businesses to get a lower tax rate:
- Transferring some or all of their workforce to another business when they own, manage or control at least 10% of both businesses
- Acquire another business for the sole purpose of getting a lower tax rate when they were not previously liable for contributions
Penalties
We impose a penalty if you violate the statute. The fine is:
- 10 percent of your taxable wages in the last completed payroll year or
- $10,000
You pay the larger amount.
Anyone who advises another person to violate or attempt to violate the statute is subject to a civil penalty of $10,000. Further, any violation of the statute is a Class E felony that can lead to imprisonment.
The New York State Department of Labor has ways to detect SUTA dumping. You may report suspected SUTA dumping in confidence. Call the UI Fraud Control Unit at (518) 485-2144, or our confidential 24 -hours toll-free fraud number at 1 (888) 598-2077.