2023 Code of Alabama › Title 25 - Industrial Relations and Labor. › Chapter 4 - Unemployment Compensation. › Article 3 - Contributions and Payments in Lieu of Contributions. › Section 25-4-54 - Contribution Rates for Employers Subject to Benefit Charges; Determination of Individual Benefit Charges.

Section 25-4-54
Contribution rates for employers subject to benefit charges; determination of individual benefit charges.
(a) Determination of contribution rates.
(1) For the 12-month period beginning on January 1 of each year which begins after December 31, 1996, any employer whose experience rating account has been subject to benefit charges throughout at least the fiscal year, as defined in Section 25-4-4, immediately preceding such January 1, shall have his or her rate determined by the Unemployment Compensation Fund's liability for benefits paid to his or her employees, modified by the fund's balance as of the most recent June 30. The employment record of an organization which has been making payments in lieu of contributions but which elects to change to payment of contributions shall be deemed to have been chargeable with benefits throughout the period (not to exceed three fiscal years) with respect to which it was making payments in lieu of contributions and its benefit charges and payrolls for such period shall be used in computing its benefit ratio pursuant to subsection (d).
(2) For the 12-month period beginning on January 1 of each calendar year which begins before January 1, 1997, the rates of contribution shall be determined as was prescribed by this section prior to January 1, 1997.
(b) Determination of individual benefit charges.
(1) An individual's benefit charges shall be as follows:
a. For each week benefits are paid, an individual's benefit charges shall be equal to the amount of benefits he or she was paid for such week.
b. For each week extended benefits pursuant to Section 25-4-75 are paid to an individual, the benefit charges shall be equal to the state's share of such benefits paid to him or her for such weeks; provided, however, where an individual's benefit charges for extended benefits are attributable to service in the employ of any governmental entity, as defined in paragraph (a)(2)b of Section 25-4-10, the individual's benefit charges shall be an amount equal to the benefits he or she was paid for such week.
(2) Any benefits paid to an individual based on wages paid to an employee during his or her base period for part-time employment by an employer who continues to give the employee employment to the same extent while he or she is receiving benefits as he or she did during his or her base period shall not be determined to be the individual's benefit charges. The employer shall establish the continuation of work to the satisfaction of the secretary by submitting such information as the secretary may require within the time required by other provisions of this chapter after the date of notification or mailing of notice by the secretary that the employee has first filed a claim for benefits.
(3) If benefits paid to an individual are based on wages paid by two or more employers, the amount of the individual's benefit charges applicable to any one employer shall be an amount which bears the same ratio to the total benefit charges as the total base period wages paid by such employer to the individual and used for the payment of benefits bears to the total base period wages paid to the individual by all his or her base period employers and used for the payment of benefits.
(4) When, in the determination of any individual's benefits, wages have been properly included once for one benefit year or for one base period, such wages shall not thereafter be included again in the computation of his or her benefits for any other benefit year or in his or her wages for any other base period respectively.
(c) Determination of employer benefit charges.
(1) An employer's benefit charges for each and every fiscal year shall be the total of the regular benefits and the state's share of the extended benefits paid during such fiscal year to all of his or her employees or former employees which are attributable to wages paid by such employer to his or her employees or former employees, except as is provided by paragraph a. of subdivision (a)(5) of Section 25-4-51 for governmental entities.
(2) The secretary shall analyze the benefit payments in each fiscal year and determine each employer's benefit charges for each fiscal year.
(3) The secretary shall, after the close of each calendar quarter, furnish each employer with a statement of the benefits paid to his or her workers, or former workers, which became his or her benefit charges in that calendar quarter, together with the names of such workers, or former workers, and such statement, in the absence of an application for a revision thereof within 30 days of the mailing of such statement to the employer's last known address, shall be conclusive and final upon the employer for all purposes and in all proceedings whatsoever. Such application for revision shall be in the form and manner prescribed by regulation of the secretary. Upon receipt of, within the time allowed, an application for revision of such statement, the secretary shall allow such application in whole or in part, or shall deny such application and shall serve notice upon the employer of such decision. Such decision of the secretary shall be final and conclusive on the employer at the expiration of 30 days from the date of service of such notice, unless the employer shall within the 30-day period file with the secretary a written protest and a petition for hearing, specifying his or her objections thereto. Upon receipt of such petition the secretary shall fix a time and place for a hearing and shall notify the employer thereof. At any hearing held as herein provided, the decision of the secretary shall be prima facie correct, and the burden shall be upon the protesting employer to prove it is incorrect. No employer shall have the right to object to the benefit charges with respect to any worker as shown on such statement, unless he or she shall first show that such charges arose as a result of benefits paid to such worker in accordance with a determination, or a redetermination, to which such employer was a party entitled to notice thereof, as provided by Article 5, commencing with Section 25-4-90, of this chapter, and shall further show that he or she was not notified of such determination or redetermination in accordance with the requirements of Article 5, commencing with Section 25-4-90, of this chapter. Nothing herein contained shall affect the right of any employer at such hearing to object to such statement of benefit charges on the ground that it is incorrect by reason of a clerical error made by the secretary or any of his or her employees. The employer shall be promptly notified by mail of the decision of the secretary. Such decision shall be final and conclusive unless an appeal is taken therefrom in the manner and within the time prescribed in subsection (h) .
(4) Nothing contained in subdivision (3) shall be construed as limiting or affecting in any manner the right and authority of the secretary to remove benefit charges from any employer's account upon discovering or being aware of any such employer's workers or former workers having drawn benefits by reason of false representation of their earnings while filing claims for benefits nor to make any corrections resulting from any adjustment to benefits paid to the individual.
(5) Any Alabama unemployment compensation benefits paid to any claimant under the following conditions shall not be charged to the account of a contributory base period employer(s) for the state fiscal year ending June 30, 1996, and each fiscal year thereafter, if:
a. The benefits are paid for unemployment due directly to a major natural disaster, and
b. The President has declared the event a disaster pursuant to the Disaster Relief Act of 1970, 42 USC § 4401, et seq., as amended, and
c. The benefits are paid from the Alabama U.I. Trust Fund to claimants who would have been eligible for disaster unemployment assistance under this act, if they have not first received Alabama unemployment insurance benefits with respect to their unemployment.
(d) Determination of employer benefit ratio. Effective January 1, 1997, and each year thereafter, the benefit ratio of each employer who qualifies for a rate determination under subdivision (a)(1) and has been chargeable with benefits throughout the three most recent preceding fiscal years shall be a percentage obtained by dividing the total of his or her benefit charges for such three-year period by that part of his or her total taxable payroll for the same three-year period with respect to which contributions have been paid on or before July 31, next following such period, and the benefit ratio of each employer who qualifies for a rate determination under subdivision (a)(1), but who has not been subject to this chapter for a period of time sufficient to have been chargeable with benefits throughout the three most recent preceding fiscal years, shall be a percentage obtained by dividing the total of his or her benefit charges for the period throughout which he or she has been chargeable, such period to be not less than the most recent preceding fiscal year by that part of his or her total taxable payroll for the same period with respect to which contributions have been paid on or before July 31 next following such period. The employer's benefit ratio shall be computed to the fourth decimal and be used in determining each employer's contribution rate as prescribed in subsection (a) for the next calendar year; except that:
For tax rate year beginning January 1, 1991, the employer's benefit ratio shall be determined by the employer's actual benefit charges to his or her account for the fiscal year ending September 30, 1990, and for fiscal years ending September 30, 1988, and September 30, 1989, the employer's benefit charges shall be determined from data accumulated by the secretary during such years relative to benefit wage charges and converted to benefit charges, in such manner as the secretary shall prescribe.
(e) Shared costs.
(1) For the purposes of this subsection (e) and for the determination of an employer's rate of contribution pursuant to subsection (f), shared or socialized cost for each fiscal year is defined to be:
a. Benefit charges which cannot be effectively assigned to an individual employer's experience rating account during such fiscal year because of the employer becoming inactive (in accordance with Section 25-4-130); and
b. The total amount of the difference between the benefit charges to all employers during the fiscal year who are assigned the maximum rate of contribution under any one of the rate schedules for the calendar year next following such fiscal year and the total amount of contributions received from all such maximum rated employers during the same fiscal year; and
c. Credits granted employers during such fiscal year because of the reason for separation (as provided in Section 25-4-78), continued part-time work, as provided by subdivision (b)(2), and relief from charges granted an employer under subdivision (c)(4); and
d. Benefit overpayments which have been declared uncollectible or have been waived by the secretary during the fiscal year pursuant to the applicable provisions of this chapter; and
e. Contributions due from employers but not paid and which have been, during such fiscal year, declared uncollectible by the bankruptcy courts or official action by the secretary; and
f. Cost resulting from the relief of charges for contributory employers under Section 25-4-54(c)(5) shall be included in shared cost as defined in this section.
(2) The total of the amounts determined under subdivision (1) shall be the statewide total shared cost for any fiscal year.
(3) Net shared costs for any fiscal year shall be the statewide total of shared costs for that fiscal year reduced (but not below zero) by the amount of:
a. Interest received by the fund from the U.S. Treasury during such fiscal year; and
b. The total amount of the difference between the contributions received from all employers during such fiscal year who are assigned the minimum rate of contributions under any one of the rate schedules for the calendar year next following such fiscal year and the total of all benefit charges made to all such minimum rated employers during the same fiscal year.
(4) To determine the shared cost ratio for any fiscal year, the net shared cost for such fiscal year shall be divided by the statewide total of taxable wages for the same fiscal year which have been reported by all contributory employers and upon which contributions have been timely paid (reduced by the total of the taxable wages reported and timely paid on by any employer or employers for the same fiscal year, who by the provisions of subdivision (5) are relieved of the shared cost assessment). The resulting quotient adjusted to the nearest multiple of one-thousandth shall be the shared cost ratio applicable for assessment to all contributory employers for the next following calendar year.
(5)a. Except as is hereinafter provided, the shared cost ratio as computed under the above provision for each fiscal year shall, for the next calendar year, be assessed each employer eligible for a rate determination under subdivision (a)(1), in addition to the rate of contributions determined by the tables contained in subsection (f).
1. Any employer whose rate of contribution has been determined to be the minimum rate allowed under Schedule A for a calendar year, shall be relieved of any shared cost assessment during that calendar year;
2. Any employer whose rate of contribution has been determined to be the minimum rate allowed under Schedule B for a calendar year and whose experience rating account has not been charged with any benefits during the three immediately preceding fiscal years, shall be relieved of any shared cost assessment for that calendar year;
3. No relief shall be granted to any employer for any portion of the shared cost assessment for a calendar year when either Schedule C or D is in effect.
b. The assessment for shared costs shall become due and payable at the same time and in the same manner as contributions.
c. The authority of the secretary to enforce collection of any shared cost assessment shall be the same as is provided in this chapter for the enforcement of the collections of contributions.
(f) Notice of contribution rate, etc.; maximum rate. The contribution rates (expressed as a percentage of taxable wages) for each employer, as provided in subsection (a), shall be determined by the secretary and the secretary shall notify each employer of his or her benefit ratio and his or her contribution rate no later than 31 days after the effective date of such rate. Such employer contribution rate for the tax rate years beginning January 1, 1991, shall be determined from the appropriate rate schedule prescribed for that tax rate year by subsection (g) and shall be the rate which appears on the same horizontal line on which is found the employer's benefit ratio.
TAX RATE TABLE
EMPLOYER TAX RATE SCHEDULE:
LINE NO.
IF THE EMPLOYER'S BENEFIT RATIO IS:
A
B
C
D
1
0.00-0.39
0.20
0.35
0.50
0.65
2
0.40-0.59
0.35
0.50
0.65
0.80
3
0.60-0.79
0.50
0.70
0.90
1.00
4
0.80-0.99
0.70
0.90
1.10
1.20
5
1.00-1.19
0.85
1.10
1.30
1.40
6
1.20-1.39
1.00
1.30
1.55
1.65
7
1.40-1.59
1.15
1.50
1.75
1.90
8
1.60-1.79
1.30
1.70
1.95
2.15
9
1.80-1.99
1.45
1.90
2.15
2.40
10
2.00-2.19
1.60
2.10
2.40
2.65
11
2.20-2.39
1.75
2.30
2.60
2.85
12
2.40-2.59
1.90
2.50
2.80
3.10
13
2.60-2.79
2.05
2.70
3.05
3.35
14
2.80-2.99
2.20
2.90
3.25
3.60
15
3.00-3.19
2.35
3.10
3.50
3.85
16
3.20-3.59
2.50
3.40
3.80
4.20
17
3.60-3.99
2.80
3.80
4.25
4.70
18
4.00-4.39
3.10
4.20
4.70
5.20
19
4.40-4.79
3.40
4.60
5.10
5.70
20
4.80-5.19
3.70
5.00
5.50
6.20
21
5.20-5.59
4.00
5.40
6.00
6.70
22
5.60-5.99
4.30
5.40
6.00
6.70
23
6.00-6.39
4.60
5.40
6.10
6.80
24
6.40-6.79
4.90
5.40
6.10
6.80
25
6.80-7.19
5.20
5.40
6.10
6.80
26
7.20 or over
5.40
5.40
6.10
6.80
The provisions of this subsection (f) to the contrary notwithstanding, the rates of contribution shall, after having been determined as herein prescribed, be adjusted as follows for calendar quarters beginning after March 31, 1992:
If the rate of contribution specified by the Tax Rate Table contained in this section is:
The employer's contribution rate shall be:
0.20
0.14
0.35
0.29
0.50
0.44
0.65
0.59
0.70
0.64
0.80
0.74
0.85
0.79
0.90
0.84
1.00
0.94
1.10
1.04
1.15
1.09
1.20
1.14
1.30
1.24
1.40
1.34
1.45
1.39
1.50
1.44
1.55
1.49
1.60
1.54
1.65
1.59
1.70
1.64
1.75
1.69
1.90
1.84
1.95
1.89
2.05
1.99
2.10
2.04
2.15
2.09
2.20
2.14
2.30
2.24
2.35
2.29
2.40
2.34
2.50
2.44
2.60
2.54
2.65
2.59
2.70
2.64
2.80
2.74
2.85
2.79
2.90
2.84
3.05
2.99
3.10
3.04
3.25
3.19
3.35
3.29
3.40
3.34
3.50
3.44
3.60
3.54
3.70
3.64
3.80
3.74
3.85
3.79
4.00
3.94
4.20
4.14
4.25
4.19
4.30
4.24
4.60
4.54
4.70
4.64
4.90
4.84
5.00
4.94
5.10
5.04
5.20
5.14
5.40
5.40
5.50
5.44
5.70
5.64
6.00
5.94
6.10
6.04
6.20
6.14
6.70
6.64
6.80
6.74
The adjustment in rates of contributions as are herein provided shall apply only to those employers who are required to pay contributions by the provisions of Section 25-4-51 and those nonprofit organizations, hospitals, educational institutions, agencies of the State of Alabama, and political subdivisions of the state who have, under the option permitted by Section 25-4-51, for that calendar year elected to pay contributions. The adjustment shall not apply to any employer who, because of insufficient unemployment experience, has not become eligible to have his or her rate of contribution determined by the method prescribed under this subsection (f); whose rate of contribution is determined to be 5.4 percent, or is above 5.4 percent and by the application of the adjustment would become a rate less than 5.4 percent; and all employers who being eligible for such option have elected the option to make payments in lieu of contributions.
(g) Determination of contribution rate schedule. Contribution rates for each employer, determined pursuant to subsection (f), shall nevertheless be subject to the contribution rate schedule as is hereinafter provided.
(1) The benefits payroll ratio of the state for each fiscal year shall be determined by dividing the total of benefits paid, including the state's portion of benefits paid under any extended benefit program, from the unemployment compensation fund within the preceding fiscal year, less any benefits paid for which payments in lieu of contributions have been paid or are currently due to be paid, by the statewide total payrolls of all employers upon which contributions on the taxable portion thereof have been paid during the same fiscal year, and by adjusting the quotient to the nearest multiple of one-thousandth.
(2) The desired level of unemployment compensation fund for each fiscal year shall be one and four-tenths times the amount determined by multiplying the highest statewide total of payrolls of all employers upon which contributions on the taxable portion thereof have been paid during any one of the three most recent preceding fiscal years by the highest benefits payroll ratio for any one of the 10 most recent preceding fiscal years.
(3) The secretary shall, on or before the December 1 next following the end of each fiscal year, declare effective for the 12-month period beginning with January 1 of the immediately succeeding calendar year, the desired level of the fund and the schedule to be in effect for that 12-month period. The contribution rate for each employer for the next calendar year shall be determined by the secretary as provided in subsection (f) on the basis of each employer's benefit ratio as determined under subsection (d); and whenever at the end of any fiscal year, the fund balance is:
a. One hundred twenty-five percent or more of the desired level computed for the fiscal year, contribution rates shall be determined under Schedule A.
b. Equal to the desired level but is less than 125 percent thereof, contribution rates shall be determined under Schedule B.
c. Less than the desired level but is at least 70 percent thereof, contribution rates shall be determined under Schedule C.
d. Less than 70 percent of the desired level, contribution rates shall be determined under Schedule D.
(4) Any amount credited to this state's account under Section 903 of the Social Security Act, as amended, which has been appropriated for expenses of administration, whether or not withdrawn from the trust fund, shall be included in the trust fund balance in determining whether or not such fund is greater or less than the desired level of the fund for a fiscal year; except, that any amount appropriated and withdrawn which will not be repaid to the fund shall not be included in such balances.
(5) The secretary shall notify each employer of such declaration and of his or her benefit ratio and his or her contribution rate no later than 31 days after the effective date of the contribution rate. This subdivision (5) shall not apply to employers who, in lieu of contributions, reimburse the fund for benefits paid.
(h) Review of contribution rate, etc. Any employer may apply to the secretary for and shall be entitled to a review as to the determination of his or her benefit ratio and his or her contribution rate as fixed by his or her benefit ratio, provided such application is filed within 30 days of the date of the mailing by the secretary to the employer of the notice of such determination. Pending such review, such employer shall make all contribution payments otherwise required by this chapter at contribution rates fixed by the determination sought to be reviewed and resulting overpayments or underpayments of contributions by the employer shall, upon any redetermination, be adjusted or refunded pursuant to Section 25-4-137. Any employer may within 30 days after the date of mailing notification by the secretary to such employer of notice of the ruling of the secretary upon such application for review appeal such ruling to the circuit court of any county wherein the employer is engaged in doing business, upon such terms and upon giving such security for costs as the court may upon application prescribe. Trial in that court shall be de novo with respect to his or her benefit ratio.
(i) Contribution rate, etc., of successor employer. For the purpose of this section, an employer's benefit charges and that part of his or her taxable payroll with respect to which contributions have been paid, shall be deemed benefit charges and taxable payrolls of a successor employer and shall be taken into account in determining the contribution rate of such successor employer as provided in subsection (f), if such successor succeeds the employer in any of the manners set out in paragraph (a)(4)a of Section 25-4-8; provided, that an employer subject to this chapter who becomes such in any of the manners set out in paragraph (a)(4)b of Section 25-4-8 may have that portion of his or her predecessor's benefit charges and that part of his or her predecessor's total taxable payroll, with respect to which contributions have been paid which correspond to the segregable portion of the business assets and payroll thereof, acquired from his or her predecessor, deemed to be his or her benefit charges and his or her payroll and such shall be taken into account in determining his or her rates, as provided in subsection (f); provided, that he or she:
(1) Makes written application within 90 calendar days from the date of such acquisition; and
(2) Furnishes to the secretary within 120 calendar days from the date of such acquisition a transcript of such total and taxable payrolls which correspond to the segregable portion acquired from his or her predecessor; provided further that in the event that within the intervening 120 days a notice of his or her rate of contribution has been mailed to the partial successor, the 30-day finality provision set forth in subsection (h) shall not prevail but, instead, be effective with respect to the subsequent notice computed on the basis of the benefit ratio and taxable payrolls of the acquired segregable portion.
(Acts 1943, No. 310, p. 281, §4; Acts 1945, No. 283, p. 449, §8; Acts 1949, No. 527, p. 810; Acts 1951, No. 644, p. 1098, §2; Acts 1955, No. 28, p. 238; Acts 1957, No. 299, p. 382; Acts 1961, Ex. Sess., No. 274, p. 2298, §5; Acts 1965, No. 390, p. 548, §1; Acts 1967, No. 167, p. 499, §2; Acts 1969, No. 234, p. 559, §§3-7; Acts 1971, No. 166, p. 440, §§10-12; Acts 1971, No. 1201, p. 2083, §1; Acts 1971, No. 2325, p. 3748, §1; Acts 1973, No. 1057, p. 1716, §4; Acts 1975, No. 801, p. 1604, §6; Acts 1978, 1st Ex. Sess., No. 1, p. 5, §5; Acts 1983, 2nd Ex. Sess., No. 83-155, p. 264, §6; Acts 1985, 2nd Ex. Sess., No. 85-804, §1; Acts 1988, 1st Ex. Sess., No. 88-783, p. 195, §4; Acts 1989, No. 89-405, p. 822, §4; Acts 1990, No. 90-586, p. 1022; Acts 1992, No. 92-174, p. 285, §5; Acts 1995, No. 95-311, §2; Acts 1995, No. 95-764, p. 1792, §1; Acts 1996, No. 96-665, p. 1093, §1; Act 98-364, p. 634, §1; Act 2000-456, p. 842, §1; Act 2001-694, p. 1453, §1; Act 2004-110, p. 164, §1; Act 2006-519, p. 1194, §1; Act 2008-501, p. 1091, §1; Act 2010-505, p. 811, §1; Act 2011-558, p. 1047, §1; Act 2013-208, p. 446, §1.)