Wisconsin Unemployment Insurance Law

Many employees are not aware of the particulars of the Wisconsin Unemployment Insurance Law. I found that while most people believe that income tax goes to pay for the law, it is actually the individual employers that pay. In fact employers pay the benefits for unemployment with each payroll payment.

Unemployment insurance taxes are also paid under what is called an “Experience” rating system that is designed to encourage steadier work and wages. There is an opportunity for government organizations and non-profit organization to finance their unemployment opportunities through a direct reimbursement basis or a tax basis. However, if a 501-C3 non-profit organization has less than four employees, it could be exempt from having to pay unemployment insurance.

Not all employers have to pay unemployment insurance taxes. In fact, the law states that employers must pay the taxes if an employee earns $1,500 or more in wages in any calendar quarter. Or, the employers have to have full or part time employees working for them for a 20-week period or more during the calendar year.

However, if an employer is in the agriculture industry and has 10 or more workers working for him doing farm labor on the same calendar day within a 20-week span of time in any given calendar year, or if the payroll for his workers is $20,000 or more in a calendar quarter, then the agriculture employer must pay the unemployment insurance taxes according to the law. Other agriculture employers may be exempt.

If an employer has domestic servants working for them and if the employer pays more than $1,000 for those servants in any given calendar year, then the employer may have to pay unemployment insurance.

In terms of knowing how much in taxes to pay, the first $10,500 in wages paid to each employee per calendar year are taxes. Also, new employers, or employers who are in the first two years of business pay at a fixed new employer rate and there is also a separate rate for construction workers.