Who Must Pay Unemployment Insurance Contributions

Most employers who have one or more persons working on a permanent, temporary or part-time basis, on one or more days in each of 13 weeks during a calendar year, or who pay wages of $1500 or more in any calendar quarter, must pay Unemployment Insurance (UI) contributions. It is not necessary that the weeks of employment be consecutive or that the employees remain the same.

Regulations relating to Employing Units subject to statute are located in MGL Chapter 151A, Section 8.

When you engage in a purchase and sale, asset purchase, acquisition/merger or transfer of assets/business with another entity operating in Massachusetts you must disclose this information to the Department of Unemployment Assistance (DUA) since the information is required under the law. This information is used by the DUA to make a determination on your entity's subjectivity to the Unemployment Insurance Law.

Please note that under the law {MGL Chapter 151A, Section 8(d),14N,14(n)(1)} the experience rating account balance {and the rate associated with said balance} of a predecessor organization might be transferred to your entity if the DUA determines successorship- as defined under the above cited sections of the law-occurred. As the successor, you would be liable for any past or future benefit charges attributable to the predecessor's account. Benefit charges are only one factor used in the calculation of an employer's contribution rate for unemployment purposes. Further information on how rates are calculated is available on this website.

Factors considered when making a liability determination are:

  • for which business or organization the employee's services are performed.
  • whether the employer directs and controls how an employee's services are performed.
  • whether such work is performed entirely in Massachusetts, or is divided between Massachusetts and another state.
  • whether such employment is legally exempt from Ul contributions.

Exempt employment includes:

Services performed by:

  • a child under the age of 18 for his/her father or mother.
  • an individual for his/her spouse.
  • an individual for his/her son or daughter.
  • services performed for certain religious organizations.
  • work training experience administered by a non-profit or public institution.
  • real estate brokers or insurance agents who work on a commission basis only (except industrial life insurance agents and governmental real estate brokers or salespersons).

Other exempt employment includes work performed by a consultant (independent contractor) if:

  • the individual is free from control and direction of the employer in the performance of the service;
  • the service is performed outside the usual course of business or outside of all places of business of the employer; and
  • the individual is engaged in an independently established trade of the same nature as the service performed for the employer.

Agricultural employers must pay Ul contributions if:

  • you paid wages of $40,000 or more in any calendar quarter, or employed 10 or more individuals on any day in each of 20 weeks in a calendar year.

Domestic employers must pay UI contributions if:

  • you paid domestic workers, including nurses and personal care attendants, $1000 or more in cash wages in any calendar quarter. This category includes private homeowners, clubs, colleges, fraternities, and sororities.

Right to Appeal

Any employer, who disagrees with a DUA determination, has the right to protest and should request a hearing within 10 days of the date DUA mails the determination.