When you are facing unemployment, you likely have lots of questions and concerns. One of those questions may be who pays for unemployment benefits: you or your employer?
Employers are always concerned with payroll taxes, which are subject to both state and federal laws. Unemployment insurance is a tax supported program with which employers must comply. The way an employer shoulders their obligation to fund unemployment insurance could affect your eligibility for unemployment benefits. Here is what you need to know about how Oklahoma funds unemployment benefits.
Oklahoma’s Unemployment Insurance Program
The unemployment system was first created in 1935 as a response to the Great Depression of the 1930s. This is a joint state and federal system. Oklahoma’s unemployment insurance program is established and governed by the Oklahoma Security Act of 1980, Okla. Stat. tit 40, sections 1-101-9-104.
Employers are required to report and pay unemployment tax for their employees. This tax includes both state and federal unemployment tax insurance. Employer contributions accrue and become payable by each employer for each calendar year in which the employer is subject to the Employment Security Act.
Contributions become due and are paid by each employer to the Oklahoma Employment Security Commission for the Unemployment Compensation Fund. Okla. Stat. tit. 40 § 3-102. This tax funds unemployment compensation programs for eligible employees in Oklahoma.
Your Employer Pays
These taxes are paid quarterly by your employer and are based on your wages up to a maximum annual amount. An employer who uses independent contractors instead of employees is not subject to paying unemployment tax. The tax only pertains to employers and employees. But if an employer wrongfully mischaracterizes an employee as an independent contractor, the employer could be subject to fines and penalties.
The employer pays this tax to the state and the state then disburses unemployment benefits to eligible employees. All benefits are paid from this fund and paid according to the rules that the Oklahoma Employment Security Commission may prescribe. Okla. Stat. tit. 40 § 2-103.
There are 3 states that withhold unemployment taxes from an employee’s check: Alaska, New Jersey, and Pennsylvania. In Oklahoma, the employer pays this tax on behalf of the employee. The tax is based on the amount of wages paid to the employee, and the tax rate varies by employer industry and experience rating.
Layoffs Can Cost Employers
In Oklahoma, an employer’s unemployment insurance rate is based on an “experience rating” that reflects factors including how long the employer has been enrolled in the unemployment system, and now many employees have filed unemployment claims against the company. Because valid unemployment claims can increase a company’s unemployment insurance rate, employers might challenge the otherwise legitimate unemployment claims of laid off workers.
Employers also pay a per-employee federal tax to pay for administrative costs associated with implementing the unemployment system.
If you have questions regarding an aspect of unemployment benefits and your legal rights, including who pays for unemployment benefits, make sure to contact an experienced Oklahoma employment lawyer to get the help you need.
Free Legal Consultation With An Experienced Unemployment Attorney
To set up your free consultation with the Oklahoma Unemployment Experts attorney’s office, call (918) 923-3776, or click the button below to sign up for a no-obligation unemployment consultation now.