24.11.2201    EXPERIENCE-RATED EMPLOYERS

(1) An experience-rated employer is a private employer whose contribution rate is based on the experience rating record of each business operated by the employer and the rate classification assigned to the employer under the contribution rate schedule.

(2) The contribution rate for each experience-rated employer is calculated by:

(a) determining the employer's experience factor;

(b) comparing that experience factor to the experience factors of all other employers; and

(c) assigning the employer a rate classification within the contribution rate schedule.

(3) The experience factor as defined in 39-51-1213 , MCA, is computed by subtracting the benefits charged to the employer's account since October 1, 1981, from the amount of contributions paid by the employer since October 1, 1981. This is the "reserve." The reserve is then divided by the average annual taxable payroll for the last three fiscal years. The resulting ratio is the experience factor, also known as the reserve ratio. The following equations show how the experience factor is calculated:

 

            Contributions paid - Benefit charges = Reserve

 

          Reserve / Average taxable payroll = Experience Factor

 

(a) Each experience-rated employer is assigned a rate classification on the contribution rate schedule depending upon the employer's experience factor.

(b) Experience-rated employers are divided into three categories: eligible, new, and deficit employers. Each category is defined in 39-51-1121 , MCA.

(4) On or before April 1 of each year, the department mails rate notices to employers. The type of notice depends upon whether the employer is:

(a) an eligible employer;

(b) a deficit employer;

(c) a new employer; or

(d) an employer with past due reports, taxes, penalties or interest.

(5) Eligible employers and deficit employers who do not have delinquent accounts are sent a rate notice with the following information:

(a) employer's taxable wages from the three fiscal years immediately preceding the computation date;

(b) amount of all contributions paid from October 1, 1981, through the computation date;

(c) amount of benefits charged to the account since October 1, 1981, through the computation date;

(d) average taxable wages for the last three fiscal years;

(e) employer's reserve and reserve ratio;

(f) tax rates for the current year; and

(g) taxable wage base for the current year.

(6) New employers who do not have delinquent accounts are sent a rate notice with the following information:

(a) tax rates for the current year; and

(b) taxable wage base for the current year.

(7) If all past due reports, taxes, penalties and interest are satisfied within 30 days of the date of mailing the rate notice, the employer's deficit, eligible, or new computed contribution rate is reinstated. The department sends the employer a revised contribution rate notice.

(8) The rate notice is final unless the employer files a written request for a redetermination within 30 days of mailing the rate notice. The request for redetermination must explain why the employer believes the assigned contribution rate is incorrect.

(9) If, after redetermination, the employer still contests the contribution rate, the employer may appeal the department's decision under 39-51-2402, MCA.

(10) Beginning in the first quarter of 2008, an assessment in the amount of .13 or .18 percent of taxable wages, as provided by 39-51-404, MCA, must be paid by all experience-rated employers and deposited in the employment security account provided for in 39-51-409, MCA. The assessment amount is not considered as "contributions" for the purposes of 39-51-401, MCA, and for purposes of reporting on form 940 Employer's Annual Federal Unemployment (FUTA) Tax Return.

History: 39-51-301, 39-51-302, MCA; IMP, 39-51-301, 39-51-404, 39-51-1103, 39-51-1121, 39-51-1123, 39-51-1213, MCA; NEW, 1988 MAR p. 2723, Eff. 1/1/89; AMD, 1992 MAR p. 803, Eff. 4/17/92; AMD, 1995 MAR p. 1950, Eff. 10/1/95; TRANS, from Dept. of Labor and Industry and AMD, 2001 MAR p. 1650, Eff. 8/24/01; TRANS, from Dept. of Revenue and AMD, 2004 MAR p. 2808, Eff. 11/19/04; AMD, 2007 MAR p. 1669, Eff. 10/26/07.