Unemployment Basics for Pennsylvania Employers
If you are an employer in the Pennsylvania, it is important for you to be familiar with the basics of the Commonwealth’s unemployment law. To start, unemployment compensation benefits are payments which are available through the state unemployment fund to employees who lost their job due to no fault of their own. The benefits are provided for a limited period of time to those employees who are able for suitable work while they seek new employment. For employers, the law requires tax contributions into the UC Trust Fund, the state-based reserve of payments that is issued to qualified the claimants.
Employers who are required to contribute to the fund are those that accept service by employees in exchange for payment under any contract – either express or implied and either oral or in writing – for work that takes place within Pennsylvania. Even if the employment is not “localized” or based in Pennsylvania, they must contribute to the fund if some of the service in performed in the state and “the base for operations” is “directed or controlled” there. If the service is not directed to a particular state and the employee lives in Pennsylvania, the employer must pay into the fund. Essentially, this means that if there is no central state where the business operates, then it must be determined where the employee is located in order to establish whether or not the employer must contribute to the unemployment compensation fund.
As a result, all covered employers must register with the Department of Labor and Industry’s Office of UC Tax Services. Additionally, employers must report wages and payment contributions on a quarterly basis to the unemployment compensation department. At specified times, employers also must withhold a portion of employee wages to cover payment to the fund. It is also important for employers to keep detailed employment records so that, if necessary, it can be reviewed by the department. According to the Department of Labor and Industry, such records include: “employment and payroll records, cash books, journals, ledgers, and corporate minutes.” Records should be maintained for at least four years and should be kept at a central business location. Daily attendance records must only be retained for a period of two years.
New employers must register with the department within thirty days of hiring an employee. Additionally, when businesses merge of change structure, the company must re-register with the department. For example, if a corporation changes into a limited liability company, re-registration is required.
Attorneys at Ruppert Manes Narahari are available to help new and existing businesses navigate the world of unemployment compensation. Schedule your consultation to receive critical advice for your company and employees.