Employers subject to unemployment insurance (UI) contributions

Learn about which employers are subject to Massachusetts unemployment insurance law.

All unemployment benefits paid through the regular unemployment insurance (UI) program are funded through employer contributions. Generally, if you are a private, for-profit employer, the Massachusetts unemployment insurance law requires you to contribute to the UI Trust Fund if your business meets the following conditions:

  • You have one or more employees working on a permanent, temporary or part-time basis, on 1 or more days in each of 13 weeks during a calendar year, or
  • You pay wages of $1,500 or more in any calendar quarter

Please note that the weeks of employment do not need to be consecutive, nor must the employees remain the same.

For certain types of employers, different thresholds must be met before they are required to make UI contributions. These include:

  • Agricultural employers
  • Domestic employers
  • Out-out-state employers

Special threshold categories

Agricultural employers

As an agricultural employer, you are subject to Ul contributions if:

  • You paid wages of $40,000 or more in any calendar quarter, or
  • You employed 10 or more individuals on any day in any 20 weeks in a calendar year
Domestic employers

If you employ domestic workers, and paid $1,000 or more in cash wages in any calendar quarter, you are subject to UI contributions.

  • Domestic workers include nurses and personal care attendants
  • Domestic employers include private homeowners, clubs, colleges, fraternities, and sororities
Out-of-state employers

Out-of-state employers employers are subject to the law once a Massachusetts payroll amount of $200 or more has been reached in a calendar quarter.

Additional Resources for Special threshold categories

Factors considered when making a liability determination

In addition to the requirements listed above, the Department of Unemployment Assistance (DUA) also considers the following factors when making a liability determination:

  • Type of legal entity of the business
  • Type of management structure
  • The location of the work performed
  • Whether the employment is legally exempt from UI contributions
For a sole proprietor For a partnership
  • Wages paid to the owner of a sole proprietorship are exempt from contributions
  • Wages paid to the partners of a partnership are exempt from contributions
  • The spouse of a sole proprietor is exempt from contributions
  • Children of the partners under 18 must be of equal relationship to each partner in order to be exempt from contributions
  • Children of a sole proprietor under age 18 are exempt from contributions
  • Parents of partners must be of equal relationship to each partner in order to be exempt from contributions

Exempt employment

Exempt employment includes:

  • Children under the age of 18 working for their mother or father
  • An individual working for his/her spouse
  • An individual working 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 an 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

Right to appeal

Any employer who disagrees with a DUA liability determination has the right to appeal and should request a hearing within 10 days of the mailing date on the determination.

Additional Resources for Right to appeal

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