Information for Employers

In Missouri, unemployment insurance is paid entirely by employers who are determined liable based on Missouri Employment Security statutes. The state unemployment insurance laws must conform to certain standards in the Federal Unemployment Tax Act (FUTA) administered by the United States Department of Labor. By conforming to these laws, Missouri employers are allowed to take a credit on federal unemployment tax returns if state taxes are paid timely.

Of prime importance to the Division is the prompt payment of unemployment benefits to eligible claimants. A person must have worked in covered employment and earned certain qualifying wages to be entitled to unemployment insurance benefits. A separate record is kept of each worker's wages as reported by their employers on quarterly contribution and wage reports.

An account is maintained for each employer to which tax payments are credited and to which unemployment benefits paid to the employer's workers are charged. The employer's tax rate is calculated annually and is based on the relationship of the account balance to the employer's average annual taxable payroll.

The Division conducts a benefit payment control program to detect and prevent improper payments. The primary means of overpayment detection is a quarterly cross match of employer wage reports with benefit payments.

Wage information and other confidential unemployment insurance information may be requested and utilized for other governmental purposes including, but not limited to, verification of an individual's eligibility for other governmental programs.

Fraud and Penalties

The Division of Employment Security aggressively investigates employer and claimant fraud. Employer fraud penalties are provided for in Sections 288.160.4, 288.380.9 and 288.395, RSMo., which may be accessed at http://www.moga.mo.gov/statutesearch/.

As provided in Section 288.110, RSMo., employers may not manipulate their unemployment insurance tax rate by SUTA Dumping. SUTA dumping allows some employers to lower their unemployment taxes by shifting their payrolls to a new business or by acquiring a different firm and using that company's lower tax rate. The accrued charges in the old account are left behind and are not picked up by the new accounts. These unpaid charges are not paid by the employer who incurred the charges, but instead are spread among all employers.

The division recently recovered $655,051 in unpaid taxes from an employer who failed to report its full share of state unemployment taxes by engaging in SUTA dumping.

2005 SUTA Dumping Legislation