Unemployment Insurance rates inherited from a previous business when changing ownership or acquiring another business can run higher or lower than the original rate, depending on the predecessor’s history. Premiums paid in and benefits paid out of the UI Trust Fund, as well as annual average payroll can affect this rate.
The act of moving employees around to different businesses for the purposes of shopping for a lower rate is considered unlawful and can be defined as SUTA (State Unemployment Tax) Dumping.
Businesses found guilty of SUTA Dumping can be assessed an 11% rate (the highest rate possible) for three straight years. A civil fine of $5,000 will also be charged with this Class 1 Misdemeanor.