43 Pa. Stat. § 781.1

Current through Pa Acts 2024-53, 2024-56 through 2024-111

Section 781.1 - Determination of Contribution Rate; Experience Rating

(a) The rate of contribution payable by an employer eligible for an adjusted rate with respect to the calendar year beginning 1984, and each calendar year thereafter, shall be adjusted between a minimum rate of three-tenths of one per centum (0.3%) and a maximum rate of eight and five-tenths per centum (8.5%) for 1984, eight and eight-tenths per centum (8.8%) for 1985, nine and two-tenths per centum (9.2%) for 1986 through 2012, eight and seven-tenths per centum (8.7%) for 2013 through 2016, nine and five one-hundredths per centum (9.05%) for 2017 and eight and ninety-five one-hundredths per centum (8.95%) for 2018 and thereafter which shall be the aggregate of three factors:

(A) A reserve ratio factor.

(B) A benefit ratio factor.

(C) A state adjustment factor.

(b)

(1) For the purpose of determining an employer's eligibility for an adjusted rate employers shall be grouped as follows:

Group 1 shall consist of those employers who have paid contributions under this act for one or more quarters in the twelve-month period ending on the computation date for the year for which the rate is applicable and have also paid contributions under this act for one or more of the four completed calendar quarters immediately preceding such twelve-month period.

Group 2 shall consist of employers who have paid contributions under this act for one or more quarters in each of the two twelve-month periods ending on the computation date for the year for which the rate is applicable and have also paid contributions under this act for one or more of the four completed calendar quarters immediately preceding such two twelve-month periods.

Group 3 shall consist of employers who have paid contributions under this act for one or more quarters in each of the three twelve-month periods ending on the computation date for the year for which the rate is applicable and have also paid contributions under this act for one or more of the four completed calendar quarters immediately preceding such three twelve-month periods.

(2) In no event shall those employers who have sufficient employer experience to be classified in Group 3 be classified in either Group 1 or Group 2, nor shall those employers who have sufficient employer experience to be classified in Group 2 be classified in Group 1.

(c)

(1) When, as of the computation date, there is a credit, zero or debit balance in such employer's reserve account, which balance shall include (i) contributions with respect to the period ending on the computation date and paid on or before september fifteenth immediately following such computation date, (ii) benefits paid on or before computation date, and shall also include any voluntary payments made in accordance with subsection (b) of section 302 of this act, his reserve ratio factor for the respective calendar year thereafter shall be as set forth in the table below.

TABLE

RESERVE RATIO FACTOR - 1984 RATES

EMPLOYERS RESERVE ACCOUNT AS A PERCENTAGE OF TAXABLE WAGES	RESERVE RATIO FACTOR
GREATER THAN 25%	0.0
GREATER THAN OR EQUAL TO 22% BUT LESS THAN 25%	0.1
GREATER THAN OR EQUAL TO 19% BUT LESS THAN 22%	0.2
GREATER THAN OR EQUAL TO 16% BUT LESS THAN 19%	0.3
GREATER THAN OR EQUAL TO 13% BUT LESS THAN 16%	0.4
GREATER THAN OR EQUAL TO 10% BUT LESS THAN 13%	0.5
GREATER THAN OR EQUAL TO 7% BUT LESS THAN 10%	0.6
GREATER THAN OR EQUAL TO 4% BUT LESS THAN 7%	0.7
GREATER THAN OR EQUAL TO 3% BUT LESS THAN 4%	0.8
GREATER THAN OR EQUAL TO 2% BUT LESS THAN 3%	0.9
GREATER THAN OR EQUAL TO 0% BUT LESS THAN 2%	1.0
LESS THAN 0% BUT GREATER THAN -2%	1.1
LESS THAN OR EQUAL TO -2% BUT GREATER THAN -4%	1.2
LESS THAN OR EQUAL TO -4% BUT GREATER THAN -6%	1.3
LESS THAN OR EQUAL TO -6% BUT GREATER THAN -8%	1.4
LESS THAN OR EQUAL TO -8% BUT GREATER THAN -10%	1.5
LESS THAN OR EQUAL TO -10% BUT GREATER THAN -12%	1.6
LESS THAN OR EQUAL TO -12% BUT GREATER THAN -14%	1.7
LESS THAN OR EQUAL TO -14% BUT GREATER THAN -16%	1.8
LESS THAN OR EQUAL TO -16% BUT GREATER THAN -18%	1.9
LESS THAN OR EQUAL TO -18% OR LOWER	2.0

TABLE

RESERVE RATIO FACTOR - 1985 RATES

EMPLOYERS RESERVE ACCOUNT AS A PERCENTAGE OF TAXABLE WAGES	RESERVE RATIO FACTOR
GREATER THAN 25%	0.0
GREATER THAN OR EQUAL TO 21% BUT LESS THAN 25%	0.1
GREATER THAN OR EQUAL TO 18% BUT LESS THAN 21%	0.2
GREATER THAN OR EQUAL TO 15% BUT LESS THAN 18%	0.3
GREATER THAN OR EQUAL TO 12% BUT LESS THAN 15%	0.4
GREATER THAN OR EQUAL TO 9% BUT LESS THAN 12%	0.5
GREATER THAN OR EQUAL TO 7% BUT LESS THAN 9%	0.6
GREATER THAN OR EQUAL TO 5% BUT LESS THAN 7%	0.7
GREATER THAN OR EQUAL TO 3% BUT LESS THAN 5%	0.8
GREATER THAN OR EQUAL TO 1% BUT LESS THAN 3%	0.9
GREATER THAN OR EQUAL TO 0% BUT LESS THAN 1%	1.0
LESS THAN 0% BUT GREATER THAN -1%	1.1
LESS THAN OR EQUAL TO -1% BUT GREATER THAN -2%	1.2
LESS THAN OR EQUAL TO -2% BUT GREATER THAN -3%	1.3
LESS THAN OR EQUAL TO -3% BUT GREATER THAN -4%	1.4
LESS THAN OR EQUAL TO -4% BUT GREATER THAN -5%	1.5
LESS THAN OR EQUAL TO -5% BUT GREATER THAN -6%	1.6
LESS THAN OR EQUAL TO -6% BUT GREATER THAN -7%	1.7
LESS THAN OR EQUAL TO -7% BUT GREATER THAN -8%	1.8
LESS THAN OR EQUAL TO -8% BUT GREATER THAN -9%	1.9
LESS THAN OR EQUAL TO -9% BUT GREATER THAN -10%	2.0
LESS THAN OR EQUAL TO -10% BUT GREATER THAN -15%	2.1
LESS THAN OR EQUAL TO -15% BUT GREATER THAN -20%	2.2
LESS THAN OR EQUAL TO -20% OR LOWER	2.3

TABLE

RESERVE RATIO FACTOR - 1986 THROUGH 2016 RATES

EMPLOYERS RESERVE ACCOUNT AS A PERCENTAGE OF TAXABLE WAGES	RESERVE RATIO FACTOR
GREATER THAN 25%	0.0
GREATER THAN OR EQUAL TO 21% BUT LESS THAN 25%	0.3
GREATER THAN OR EQUAL TO 18% BUT LESS THAN 21%	0.4
GREATER THAN OR EQUAL TO 15% BUT LESS THAN 18%	0.5
GREATER THAN OR EQUAL TO 12% BUT LESS THAN 15%	0.6
GREATER THAN OR EQUAL TO 9% BUT LESS THAN 12%	0.7
GREATER THAN OR EQUAL TO 7% BUT LESS THAN 9%	0.8
GREATER THAN OR EQUAL TO 5% BUT LESS THAN 7%	0.9
GREATER THAN OR EQUAL TO 3% BUT LESS THAN 5%	1.0
GREATER THAN OR EQUAL TO 1% BUT LESS THAN 3%	1.1
GREATER THAN OR EQUAL TO 0% BUT LESS THAN 1%	1.2
LESS THAN 0% BUT GREATER THAN -1%	1.3
LESS THAN OR EQUAL TO -1% BUT GREATER THAN -2%	1.4
LESS THAN OR EQUAL TO -2% BUT GREATER THAN -3%	1.5
LESS THAN OR EQUAL TO -3% BUT GREATER THAN -4%	1.6
LESS THAN OR EQUAL TO -4% BUT GREATER THAN -5%	1.7
LESS THAN OR EQUAL TO -5% BUT GREATER THAN -6%	1.8
LESS THAN OR EQUAL TO -6% BUT GREATER THAN -7%	1.9
LESS THAN OR EQUAL TO -7% BUT GREATER THAN -8%	2.0
LESS THAN OR EQUAL TO -8% BUT GREATER THAN -9%	2.1
LESS THAN OR EQUAL TO -9% BUT GREATER THAN -10%	2.2
LESS THAN OR EQUAL TO -10% BUT GREATER THAN -11%	2.3
LESS THAN OR EQUAL TO -11% BUT GREATER THAN -12%	2.4






LESS THAN OR EQUAL TO -12% BUT GREATER THAN -16%	2.5
LESS THAN OR EQUAL TO -16% BUT GREATER THAN -20%	2.6
LESS THAN OR EQUAL TO -20% OR LOWER	2.7

RESERVE RATIO FACTOR - 2017 AND THEREAFTER RATES

EMPLOYERS RESERVE ACCOUNT AS A PERCENTAGE OF TAXABLE WAGES	RESERVE RATIO FACTOR
GREATER THAN 25%	0.0
GREATER THAN OR EQUAL TO 21% BUT LESS THAN 25%	0.3
GREATER THAN OR EQUAL TO 18% BUT LESS THAN 21%	0.4
GREATER THAN OR EQUAL TO 15% BUT LESS THAN 18%	0.5
GREATER THAN OR EQUAL TO 12% BUT LESS THAN 15%	0.6
GREATER THAN OR EQUAL TO 9% BUT LESS THAN 12%	0.7
GREATER THAN OR EQUAL TO 7% BUT LESS THAN 9%	0.8
GREATER THAN OR EQUAL TO 5% BUT LESS THAN 7%	0.9
GREATER THAN OR EQUAL TO 3% BUT LESS THAN 5%	1.0
GREATER THAN OR EQUAL TO 1% BUT LESS THAN 3%	1.1
GREATER THAN OR EQUAL TO 0% BUT LESS THAN 1%	1.2
LESS THAN 0% BUT GREATER THAN -1%	1.3
LESS THAN OR EQUAL TO -1% BUT GREATER THAN -2%	1.4
LESS THAN OR EQUAL TO -2% BUT GREATER THAN -3%	1.5
LESS THAN OR EQUAL TO -3% BUT GREATER THAN -4%	1.6
LESS THAN OR EQUAL TO -4% BUT GREATER THAN -5%	1.7
LESS THAN OR EQUAL TO -5% BUT GREATER THAN -6%	1.8
LESS THAN OR EQUAL TO -6% BUT GREATER THAN -7%	1.9
LESS THAN OR EQUAL TO -7% BUT GREATER THAN -8%	2.0
LESS THAN OR EQUAL TO -8% BUT GREATER THAN -9%	2.1
LESS THAN OR EQUAL TO -9% BUT GREATER THAN -10%	2.2
LESS THAN OR EQUAL TO -10% BUT GREATER THAN -11%	2.3
LESS THAN OR EQUAL TO -11% BUT GREATER THAN -12%	2.4
LESS THAN OR EQUAL TO -12% BUT GREATER THAN -16%	2.5
LESS THAN OR EQUAL TO -16% BUT GREATER THAN -20%	2.6
LESS THAN OR EQUAL TO -20% BUT GREATER THAN -28%	2.7
LESS THAN OR EQUAL TO -28% BUT GREATER THAN -100%	3.0
LESS THAN OR EQUAL TO -100% OR LOWER	3.2

(2) Notwithstanding the provisions of this subsection, any employer subject to section 301.1 who is a Group 1 employer as determined by subsection (b) of this section shall have a Reserve Ratio Factor equal to one-third of the Reserve Ratio Factor as determined by paragraph (1) of this subsection.

(3) Notwithstanding the provisions of this subsection, any employer subject to section 301.1 who is a Group 2 employer as determined by subsection (b) of this section shall have a Reserve Ratio Factor equal to two-thirds of the Reserve Ratio Factor as determined by paragraph (1) of this subsection.

(4) If upon application of paragraph (2) or (3) of this subsection the reduced Reserve Ratio Factor is not a multiple of one-tenth of one per centum (0.1%) it shall be rounded to the next higher multiple of one-tenth of one per centum (0.1%)

As used in the foregoing table, the percentages indicate the ratio of the balance in an employer's reserve account to his average annual payroll. Each percentage group shown includes the fractional percentage between such percentage group and the immediately higher percentage group for employers with a zero or credit balance. For employers with a debit balance, each percentage group includes the fractional percentage between such percentage group and the immediately lower percentage group.

(d) An employer's Benefit Ratio Factor shall be computed on the basis of the following formula:

Average Annual Benefits	x 100 = Benefit Ratio Factor
Average Annual Payroll

to a tenth of a percentum, rounding all fractional parts of a tenth of a per centum to the nearest tenth of a per centum. No Benefit Ratio Factor shall be more than five per centum (5%) nor less than zero per centum (0%).

(d.1)

(1) Notwithstanding any other provision of this act, and for purposes of this section only, an employer whose employer account was charged with compensation in each of the five calendar years 1979 through 1983 and whose average annual benefits for the period beginning July 1, 1980 and ending June 30, 1983 would, as provided hereinbefore, equal or exceed five per centum (5%) of the employer's average annual payroll, shall be allowed to elect as an option the alternative benefit ratio provided for in this subsection to be used in determining the employer's Benefit Ratio Factor for the calendar years 1985 and 1986.

(2) Annual benefits for each of the periods July 1, 1981 through June 30, 1982 and July 1, 1982 through June 30, 1983 shall be arbitrarily adjusted to equal five per centum (5%) of the employer's annual payroll for the same period.

(3) Such adjusted annual benefits for each of the twelve-month periods shall be added to the actual annual benefits for the period from July 1, 1983 to June 30, 1984 and such sum shall be divided by three (3) to determine the average annual benefits used to calculate the employer's Benefit Ratio Factor for calendar year 1985.

(4) Such adjusted annual benefits for the twelve-month period ending June 30, 1983 shall be added to the actual annual benefits for the period from July 1, 1983 to June 30, 1985 and such sum shall be divided by three (3) to determine the average annual benefits used to calculate the employer's benefit ratio factor for calendar year 1986.

(5) In addition to the other provisions of this subsection, an employer shall not be entitled to elect the alternative benefit ratio of this subsection unless such employer has no pending appeals of benefit charges and agrees to waive all right to appeal any benefit charges, applicable to the period July 1, 1980 through June 30 1983.

(e)

(1) Except as provided in paragraph (2), the State Adjustment Factor for a calendar year shall be computed as of the computation date for such year to a tenth of a per centum, rounding all fractional parts of a tenth of a per centum to the nearest tenth of a per centum, but in no event less than zero , according to the following formula:

Bdr - Dcr

----------------------- X 100 = State Adjustment Factor

in which factor "Bdr" equals the aggregate of (1) all benefits paid but not charged to employers' accounts, plus, (2) all benefits paid and charged to inactive and terminated employers' accounts, plus, (3) all benefits paid and charged to accounts of active employers for the preceding year to the extent such benefits exceed the combined amount of contributions payable by such employers on the basis of the Benefit Ratio Factor and the Reserve Ratio Factor. Factor "Dcr" equals the aggregate of (1) interest credited to the Unemployment Compensation Fund, plus, (2) amounts transferred from the Special Administration Fund and the Debt Service Fund to the Unemployment Compensation Fund, plus, (3) refunds of benefits unlawfully paid, plus, (4) amounts credited to the Unemployment Compensation Fund by the Federal Government other than by loan, except that any amount credited to this Commonwealth's account under section 903 of the Federal Social Security Act which has been appropriated for expenses of administration shall be excluded from the amount in the Unemployment Compensation Fund in the computation of the "Dcr" factor. Factor "Wt" equals all wages subject to the law up to the limitation described in section 4(x)(1) paid by all employers. Each item in each factor shall be computed with respect to the twelve-month period ending on the computation date: Provided, That should the computed State Adjustment Factor for any year exceed the maximum rate allowed under this section, such excess over the maximum rate shall be added to the computed State Adjustment Factor for the following year or years.

(2) The maximum State Adjustment Factor shall be one per centum (1.0%) for calendar years 2013 through 2016, eighty-five one-hundredths of one per centum (.85%) for calendar year 2017 and seventy-five one-hundredths of one per centum (.75%) for calendar year 2018 and thereafter.

(f) An employer whose reserve account balance is adjusted after January 1, 1980 in accordance with the provisions of section 302(c) of this act shall not be eligible for a reduced rate of contributions under the provisions of this act for the three consecutive calendar years following the computation date with respect to which the application for adjustment was made and shall pay contributions at the maximum rate specified under subsection (a) of this section and sections 301.2 and 301.6 for three years. In the event an employer shall file one or more subsequent applications for adjustment, the provisions of this subsection shall apply to each such application.

(f.1) Notwithstanding any other provisions of this act, employers who elected to have their negative reserve account balance adjusted for taxable years 1978, 1979 or 1980 will be liable for contributions at the maximum rate specified in section 301.1 and as determined under sections 301.2 and 301.3 .

(g) Wages paid to employes of construction contractors pursuant to a contract or subcontract entered into before July 1, 1983 for the construction, reconstruction or remodeling of structures where the contract or subcontract is either at a fixed price not subject to change or modification or entered into pursuant to the obligation of a formal written bid which cannot be altered or withdrawn shall continue to be subject to the employer's assigned tax rate and the taxable wage base for 1983. This subsection shall not apply to any year following calendar year 1984. No rate assigned any employer who receives a rate on the basis of employment and wages to which this subsection applies shall be less than two and seven-tenths per centum (2.7%) for calendar year 1983 or 1984 and no rate shall be less than five and four-tenths per centum (5.4%) for calendar year 1985 and thereafter.

43 P.S. § 781.1

Amended by P.L. TBD 2016 No. 144, § 2, eff. 11/3/2016.

Amended by P.L. 577 2012 No. 60, § 2, eff. 1/1/2013.

1936, Second Ex.Sess., Dec. 5, P.L. (1937) 2897, art. III, § 301.1, added 1959, Dec. 17, P.L. 1893, No. 693, § 3. Amended 1964, Special Sess., March 24, P.L. 53, No. 1, § 3; 1964, Special Sess., June 22, P.L. 112, No. 7, § 10; 1971, Sept. 27, P.L. 460, No. 108, § 13; 1972, Dec. 6, P.L. 1622, No. 336, § 1, imd. effective; 1974, Dec. 5, P.L. 771, No. 262, § 5, imd. effective; 1976, July 9, P.L. 842, No. 147, § 1; 1980, July 10, P.L. 521, No. 108, § 5, imd. effective; 1983, July 21, P.L. 68, No. 30, § 9, effective Jan. 1, 1984.