What is State Unemployment Insurance (SUI)?
State Unemployment Insurance (SUI) is an employer-funded program and tax required by state and federal law. The insurance pays unemployed workers benefits while they are seeking new employment. Employers typically must register for a SUI account number and pay state unemployment insurance in every state in which they have an employee working.
When you work with a professional employer organization (PEO) like Justworks, each state will fall into one of three categories: PEO-reporting, client-reporting and hybrid states.
For PEO-reporting states, Justworks is the employer of record for state unemployment insurance tax and will manage filing for your team. This is done in aggregate under Justworks’ EIN and SUI account number. If your team currently has an active account in a PEO-reporting state, that account should be closed to avoid delinquency notices and fines from the state.
Current PEO-Reporting States:
Alabama, Arizona, California, Colorado, Florida, Georgia, Hawaii, Idaho, Illinois*, Indiana, Maryland, Montana, New Hampshire, New Jersey, New Mexico, New York, North Carolina, Oklahoma, Oregon, Texas, Utah, Virginia and West Virginia
*In some situations, Illinois will require client-level reporting
Client-reporting states require employers to file using an unemployment account that is directly tied to their EIN.
- If you already have your own account in one of the states listed below, Justworks will need to collect account information such as your account number and current rate.
- If you don’t already have your own account, but have employees working in one of the states below, we will register for an account in the applicable state on your behalf and only reach out if something is needed from you.
Current Client-Reporting States:
Alaska, Connecticut, Delaware, Iowa, Kentucky, Louisiana, Massachusetts, Michigan, Minnesota, Mississippi, Nebraska, Nevada, North Dakota, Ohio, Pennsylvania, Rhode Island, South Carolina, South Dakota, Vermont, Washington and Wisconsin
Hybrid Reporting States
A few states require your company to have an individual unemployment account that is associated with Justworks’ master account in the state.
If you opened an account in one of these states before joining Justworks, you will need to close the account using closure instructions that our team will provide. Justworks will register for an account that is associated with our master account in that state, and we will reach out if something is needed from your end.
Current Hybrid Reporting States:
Arkansas, Kansas, Maine, Missouri, Tennessee and Wyoming
Hiring in Client-Reporting and Hybrid States
Here’s what you can expect when you hire your first employee in a client-reporting or hybrid state while on Justworks:
We will reach out if any action is needed. However, for many states, no outreach is necessary in order for us to complete the registration on your behalf.
Each state has a different threshold to determine when a company meets liability to be registered, and we will follow each respective state’s guidelines accordingly.
If you are still in the onboarding process, an onboarding point of contact will follow up to collect information regarding any existing SUI accounts you might have.
- Any corporate tax filings or business registrations will need to be handled by your company directly, outside of Justworks. We recommend discussing the implications of hiring in a new state - including registering for a SUI account in that state where applicable, with your legal and/or tax advisor(s).
Third-Party Access (TPA)
If you have an unemployment account for a client-reporting state that was opened before joining Justworks, our team may reach out to request third-party access (TPA). This gives Justworks the ability to access your account and file on your behalf.
TPA requirements vary by state, and our team will reach out with the applicable instructions if needed. Please note that if your team joins mid-quarter, Justworks may wait until after your previous provider files to request TPA.
If we don’t receive a response to our request, we will be unable to file on your behalf, and any penalties or interest that result will be the responsibility of your company.
State Issued Notices
States often send out notices to employers, such as filing reminders, updates regarding account information, or assessing penalties. If you receive a notice from a state that requires action, please send it to Justworks immediately.
Pro Tip: States often send filing reminders at the end of every quarter. If the notice doesn’t show a past due amount and looks just to be a filing reminder, there is no need to send it our way. Once we’ve received all required account information and third-party access, we will file timely on your behalf every quarter moving forward.
Justworks files for your company under our own withholding accounts for all states from the time you start with us moving forward. You will not need to open any new withholding accounts if you hire an employee in a new state.*
If you used a different payroll provider before joining Justworks, you will likely have withholding accounts open that will need to be closed. Do not close the account until your previous provider has filed for the last quarter you were using their services. Your previous provider is responsible for completing all quarterly and annual filings and reconciliations during the time you were with them.
*Subject to an active Justworks account.
This material has been prepared for informational purposes only and is not intended to provide, and should not be relied on for, legal or tax advice. If you have any legal or tax questions regarding this content or related issues, then you should consult with your professional legal or tax advisor.