Requirements

• Although an employer might qualify as an employing unit under the law, the employer might not have to pay unemployment taxes. Certain elements are exempt based upon various federal and state guidelines. For example, in Texas, an employer hiring a lawyer is considered an employing unit but is not required to pay unemployment insurance on the attorney. The same holds true for various independent contractors. While the employer technically employs the contractor, the contractor does not fall under the guidelines of being an employee.
  
  

Registration

• Under the law, employers pay unemployment taxes, provided the workers meet the employee guidelines set up by the state. Businesses with employees register with the individual state workforce agency. If a business fails to register employees with the agency, fines and penalties may be imposed.
  
  

State Differences

• Different states have different requirements for paying unemployment taxes. For example, in Florida, because of increasing fiscal demands on the state budget, unemployment benefits were targeted by the state legislature. Because businesses bear the burden of paying unemployment benefits, businesses found themselves laying off workers to pay into the unemployment system. This led to a downturn in the state economy, which led lawmakers to send a proposal to the governor reducing the amount of unemployment taxes collected from businesses by 10 percent.
  
  

Reimbursement

• In states such as Texas, in the event an employer does not pay into the unemployment insurance pool but an employee collects unemployment benefits, the law usually requires the employer to reimburse the state for any unemployment benefits paid to the individual. In addition, certain fines and additional fees may be added to the employer's record.
  
  

EMPA

• To cut down on the number of employers failing to classify employees, the Employee Misclassification Prevention Act (EMPA) was a bill introduced by Ohio senator Sherrod Brown. One of the provisions in the bill was to keep better track of employers failing to classify employees properly when it came to unemployment insurance. Although the bill made it to one of the Senate committees, it did not meet the requirements to become law.