Experience Rating Index for unemployment tax rate year 2003
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U.S. Department of Labor
Employment and Training Administration
Advisory System
Washington, D.C. 20210
Classification: UI
Correspondence symbol: OWS/DFAS
Date: March 15, 2005
Rescissions: None
Expiration date: March 31, 2006
ADVISORY: UNEMPLOYMENT INSURANCE PROGRAM LETTER NO. 15-05
TO: STATE WORKFORCE AGENCIES
FROM: CHERYL ATKINSON /s/
Administrator
Office of Workforce Security
SUBJECT: Experience Rating Index for Rate Year 2003
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Purpose. To transmit the Experience Rating Index (ERI) for states for rate year 2003.
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References. Unemployment Insurance Program Letter (UIPL) No. 3-92, UIPL No. 37-93, UIPL No. 40-94, UIPL No. 32-95, UIPL No. 25-96, UIPL No. 13-98, UIPL No. 5-99 and UIPL No. 26-03.
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Background. The referenced UIPLs published the ERI for Rate Years 1988 - 2002. This UIPL continues the ERI series.
Experience rating is the system by which tax rates vary in relation to an employer's experience with unemployment. Experience rating has three major objectives: to serve as an incentive to stabilize employment, to produce proper allocation of the cost of unemployment benefits and to encourage employer participation in the program. The Experience Rating Index attempts to measure the degree of experience rating in states' Unemployment Insurance systems by determining the proportion of benefits that are effectively charged to employers. Effectively charged benefits are those benefits that are charged to the beneficiaries' former employer(s) and paid for by that employer. Attachment I shows the historical series of the ERI from rate year 1988 to rate year 2003 for all states. Attachment II shows the ERI for rate year 2003 and the values used to calculate the ERI. Attachment III describes how the ERI is calculated and defines ineffective charges, inactive charges and noncharges. The higher the ERI, the greater the degree of experience rating.
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Action Required. Please distribute to appropriate staff.
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Inquiries. Direct inquiries to the appropriate Regional Office.
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Attachments.
i. Experience Rating Index by State for Rate Years 1988 - 2003.
ii. Experience Rating Index by State for Rate Year 2003.
iii. Calculation of Experience Rating Index.
Attachment 1 (official PDF): https://www.dol.gov/sites/dolgov/files/ETA/advisories/UIPL/2005/UIPL15-05_Attach1.pdf
EXPERIENCE RATING INDEX Attachment I
1988 - 2003
STATE 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003
Alabama 71 78 74 56 49 64 52 57 60 51 INA 59 65 69 58 60
Alaska (Payroll Decline System - ERI cannot be calculated)
Arizona 80 80 83 78 69 76 81 83 76 77 INA INA INA 54 50 INA*
Arkansas 48 47 56 60 58 53 INA INA 56 61 60 60 59 59 59 INA*
California 65 67 68 64 52 53 53 58 57 59 INA 61 61 INA INA INA
Colorado 45 53 60 65 64 62 68 66 56 56 65 73 72 72 70 35
Connecticut 62 64 58 47 42 49 59 60 65 66 70 INA INA 65 68 58
Delaware INA 51 71 70 INA 54 47 57 60 Report Not Required
Dist. of Columbia 47 56 72 72 62 INA 64 INA 78 77 78 INA 86 INA INA INA
Florida 68 66 50 56 53 INA 75 72 71 71 INA INA INA 55 62 51
Georgia 61 65 62 65 52 58 75 79 80 67 51 INA 12 13 14 12
Hawaii 71 56 66 63 32 36 33 44 44 45 47 54 56 57 51 57
Idaho 55 64 58 53 44 54 50 60 58 53 51 53 53 51 54 46
Illinois 72 76 76 78 74 71 79 82 83 75 88 87 88 INA 57 49
Indiana 81 91 94 84 78 75 75 75 69 60 60 65 59 56 44 43
Iowa 78 77 67 70 74 67 66 62 70 64 60 62 66 66 62 64
Kansas 64 73 69 69 57 58 59 18 16 68 INA 57 63 62 58 56
Kentucky 79 79 75 72 58 66 72 63 70 67 INA 68 69 66 65 52
Louisiana 42 87 85 88 83 77 75 77 72 70 68 65 63 INA 64 55
Maine 62 60 60 52 41 50 60 59 58 55 60 62 54 59 47 41
Maryland INA 72 62 62 65 INA INA INA INA INA INA INA INA INA INA 43
Massachusetts 55 54 50 40 43 47 58 58 50 55 63 INA 63 63 56 38
Michigan 80 67 72 70 63 73 77 78 73 INA 68 72 67 INA INA INA*
Minnesota 67 66 69 62 58 64 69 INA 72 74 INA 62 63 59 30 INA*
Mississippi 40 54 53 42 51 53 50 52 50 42 47 47 46 47 44 44
Missouri 61 58 59 61 55 63 70 63 69 68 65 INA 60 59 53 50
Montana 54 58 62 61 55 62 63 61 60 INA INA INA INA INA 48 INA*
Nebraska 61 57 63 60 57 56 55 57 50 48 INA 47 46 48 46 45
Nevada 66 67 68 63 41 59 72 77 80 76 76 72 INA INA INA INA
New Hampshire INA INA 81 72 55 68 77 82 84 82 81 INA 53 63 72 INA*
New Jersey INA 78 75 70 63 51 38 61 64 59 INA 56 58 60 51 45
New Mexico 51 59 63 63 62 62 67 64 63 63 INA 57 51 INA INA 53
New York 80 73 61 55 51 82 84 85 86 85 83 71 71 71 71 68
North Carolina INA INA INA 50 44 42 31 INA 8 44 37 INA INA 40 43 INA*
North Dakota 62 65 57 64 60 56 64 59 62 52 72 INA 77 79 81 80
Ohio 70 74 74 70 65 65 73 71 72 62 62 INA INA INA INA INA*
Oklahoma 50 64 60 47 28 34 47 52 51 50 51 36 23 37 22 26
Oregon 59 63 56 60 51 50 48 45 55 54 70 52 53 54 54 44
Pennsylvania 66 69 65 62 56 57 64 64 62 55 61 60 59 61 59 INA*
Puerto Rico INA INA INA INA INA INA INA 83 INA INA INA INA 79 INA INA INA
Rhode Island 75 69 68 58 55 64 75 72 70 66 INA INA 73 INA 70 66
South Carolina 58 62 65 61 54 52 58 56 57 57 60 58 56 56 52 41
South Dakota 59 38 48 45 49 44 47 53 50 47 INA 47 47 56 45 43
Tennessee INA 69 66 68 71 73 73 65 63 65 46 61 61 INA 52 57
Texas 53 58 55 52 51 49 INA 53 55 53 INA INA 56 61 61 56
Utah 61 70 70 69 66 61 66 68 73 INA INA INA INA INA INA INA
Vermont 70 66 63 58 54 48 51 48 49 48 47 INA 43 43 40 34
Virgin Islands INA INA INA INA INA INA INA INA INA INA INA INA INA INA INA INA
Virginia 65 68 70 61 51 66 77 81 79 74 58 62 64 68 52 36
Washington 60 63 63 61 57 56 55 50 51 55 58 61 58 64 57 INA*
West Virginia 83 51 56 58 56 62 59 58 60 53 INA INA INA 55 57 58
Wisconsin 90 82 78 66 65 70 70 69 67 65 63 63 INA 60 57 50
Wyoming 38 62 INA 55 63 60 41 46 42 43 INA 48 INA 55 59 58
INA - Information Not Available.
DE and OK are Benefit Wage Ratio States. The numbers provided by these states are estimates and the data is not required.
* Reported data failed consistency checks
Attachment 2 (official PDF): https://www.dol.gov/sites/dolgov/files/ETA/advisories/UIPL/2005/UIPL15-05_Attach2.pdf
Attachment II
EXPERIENCE RATING INDEX BY STATE
RATE YEAR 2003
STATE Experience IEC IAC NNC BEN ERI
Rating ($000s) as % of ($000s) as % of ($000s) as % of ($000s)
System BEN BEN BEN
Alabama BR 75,369 25.9% 12,263 4.2% 28,185 9.7% 290,581 60
Alaska PD NA NA NA NA 125,231 100.0% 125,231 NA
Arizona RR INA INA INA INA INA INA INA INA
Arkansas RR INA INA INA INA INA INA INA INA
California RR INA INA 581,153 13.1% 297,613 6.7% 4,429,370 INA
Colorado RR 242,801 51.1% 51,389 10.8% 13,055 2.7% 474,981 35
Connecticut BR 147,326 23.3% 69,833 11.0% 47,508 7.5% 632,606 58
Delaware BWR NA NA 6,609 6.5% 24,855 24.4% 101,951 NA
Dist. of Columbia RR REPORT NOT SUBMITTED
Florida BR 267,265 23.8% 116,669 10.4% 162,197 14.4% 1,123,966 51
Georgia RR 529,341 72.1% 74,797 10.2% 41,609 5.7% 734,667 12
Hawaii RR 17,638 11.9% 17,664 11.9% 27,903 18.9% 147,937 57
Idaho RR2 57,119 33.5% 3,917 2.3% 30,356 17.8% 170,669 46
Illinois BR 977,576 42.5% 42,759 1.9% 149,405 6.5% 2,302,022 49
Indiana RR 208,857 30.2% 95,642 13.8% 86,717 12.5% 691,298 43
Iowa BR2 39,691 11.3% 26,148 7.4% 59,137 16.8% 351,407 64
Kansas RR2 49,464 18.8% 20,608 7.8% 45,192 17.2% 262,762 56
Kentucky RR 148,934 31.3% 33,126 7.0% 45,627 9.6% 476,561 52
Louisiana RR 60,348 24.8% 5,386 2.2% 43,340 17.8% 242,998 55
Maine RR2 18,230 15.7% 798 0.7% 49,721 42.9% 116,014 41
Maryland BR 107,986 21.2% 43,492 8.6% 136,099 26.8% 508,372 43
Massachusetts RR 970,139 51.1% 3,562 0.2% 195,423 10.3% 1,899,416 38
Michigan BR3 363,165 18.7% INA INA 162,967 8.4% 1,939,229 INA
Minnesota BR INA INA INA INA INA INA INA INA
Mississippi BR 52,090 27.2% 20,791 10.9% 33,345 17.4% 191,214 44
Missouri RR 166,034 29.7% 3,607 0.6% 111,616 20.0% 559,145 50
Montana RR2 13,921 20.4% INA INA 9,495 13.9% 68,314 INA
Nebraska RR 24,013 20.8% 6,506 5.6% 33,539 29.1% 115,450 45
Nevada RR2 INA INA INA INA 49,139 13.5% 365,223 INA
New Hampshire RR INA INA 15,580 14.2% 18,018 16.4% 110,099 INA
New Jersey RR 648,827 31.4% 207,449 10.0% 274,803 13.3% 2,067,147 45
New Mexico RR 19,717 18.1% 7,318 6.7% 23,620 21.7% 108,715 53
New York RR 688,776 21.6% 234,512 7.4% 94,121 3.0% 3,188,142 68
North Carolina RR INA INA INA INA INA INA INA INA
North Dakota RR2 996 2.3% 2,814 6.4% 5,160 11.7% 44,112 80
Ohio RR INA INA INA INA 158,970 11.2% 1,424,067 INA
Oklahoma1 BWR 101,341 43.4% 32,459 13.9% 38,744 16.6% 233,313 26
Oregon BR2 235,910 28.8% 67,981 8.3% 155,499 19.0% 819,307 44
Pennsylvania BR3 INA INA 189,415 7.9% 276,881 11.5% 2,408,456 INA
Puerto Rico RR REPORT NOT SUBMITTED
Rhode Island RR 33,408 18.4% 11,035 6.1% 18,193 10.0% 181,853 66
South Carolina RR 141,222 32.4% 56,042 12.8% 61,621 14.1% 436,459 41
South Dakota RR 10,206 34.4% 1,606 5.4% 4,961 16.7% 29,628 43
Tennessee RR 99,446 16.9% 89,108 15.1% 67,001 11.4% 588,486 57
Texas BR 343,936 16.3% 198,513 9.4% 395,204 18.7% 2,114,856 56
Utah BR INA INA 22,480 9.7% 54,001 23.3% 231,843 INA
Vermont BR2 31,190 33.7% 11,948 12.9% 17,819 19.2% 92,684 34
Virgin Islands RR REPORT NOT SUBMITTED
Virginia BR 302,584 51.5% 34,137 5.8% 37,141 6.3% 587,299 36
Washington BR2 INA INA INA INA INA INA INA INA
West Virginia RR 29,777 21.4% 17,283 12.4% 11,090 8.0% 138,867 58
Wisconsin RR 257,194 27.6% 44,817 4.8% 161,782 17.3% 933,381 50
Wyoming BR 6,109 21.8% 494 1.8% 5,113 18.3% 28,003 58
DE is Benefit-Wage states and is not required to report Ineffective Charges.
AK is a Payroll Decline state and is not required to report Ineffective Charges.
1 State supplied estimate of IEC
2 State uses an array method for assigning tax rates.
3 State also uses reserve ratio elements in its system.
RR - Reserve Ratio; BR - Benefit Ratio; BWR - Benefit Wage Ratio; PD - Payroll Decline
INA- Information Not Available
NA -Not Applicable
* Reported data failed consistancy checks
Attachment 3 (official HTML): https://www.dol.gov/sites/dolgov/files/ETA/advisories/UIPL/2005/UIPL15-05_Attach3.html
ERI CALCULATION
The Experience Rating Index is calculated by first computing "effective benefit charges" by taking the total benefits paid during the reporting period and subtracting from them the ineffective charges, inactive charges, and noncharges. The remainder is then divided by the total benefits.
ERI = ((BEN-(IEC+IAC+NNC)) / BEN )* 100
where,
IEC = Ineffective charges: Calculated from the ETA 204, Section C. -- Those charges for which employer taxes do not fully cover the benefits charged. Employers are aggregated, by experience factor, into approximately 30 groups. Within each group, the excess, if any, of benefits charged over estimated contributions is calculated. IEC is the sum of these excesses over all groups.
IAC = Inactive charges: ETA 204, Section B, item 6(a) (2). -- Charges to employers who have gone out of business and from which taxes cannot be collected.
NNC = Noncharges: ETA 204, Section B, item 6(b) plus item 7(b) -- Payments made to claimants, but not charged to a particular employer.
BEN = Total benefits paid during the computation year: ETA 204, Section B, item 5 minus item 7(a).
Example:
State Data: IEC = 50,588
IAC = 12,132
NNC = 38,182
BEN = 205,777
State’s ERI = ((BEN-(IEC+IAC+NNC)) / BEN) * 100
= ((205777 - (50588 + 12132 + 38182)) / 205777) * 100
= 51
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