[ 1.3.1 - Basis for Liability ] [ 1.3.2 - Liability Provisions Under 201.021 ] [ 1.3.3 - $1500 Provision ] [ 1.3.4 - Twenty Week Provision ] [ 1.3.5 - STA Screen Processing ] [ 1.3.6 - STR Screen (Report Liability Screen) ]

This section of the act outlines the provisions under which most employers become liable for state unemployment tax. This section is applied only to "Regular" type employment. Never apply Section 201.021 to "Domestic" or "Farm & Ranch" employment when determining liability. Additionally Section 201.021 applies to taxed employers only. Never establish liability for reimbursing employers under Section 201.021.

Liability under this section of the law is normally based on Status Reports or Employer's Quarterly Reports. If the liability is based on an Employer's Quarterly Report, an FL-160, C-1 Request Letter, must be sent to request completion of a Status Report.

Section 201.021 lists two ways employers can become liable under the Act. Employers become liable under this section of the Act by:

Liability under this section is an either/or situation. An employer becomes liable because they paid $1,500 in a quarter or because they had 20 weeks of employment, whichever occurs first.

When determining liability under the $1,500 criteria, all wages should be considered. That is, if the employer paid some of the wages in something other than cash, the value of this non-cash payment should be considered when determining liability. A common example, is for an apartment manager to be provided room as part of her remuneration. The value of the room and board should be used to determine liability.

The 20 week criteria is often difficult for employers to understand. For this reason, care should be exercised when explaining this provision of the law. An employer will become liable under the Act if they have employment in twenty different weeks during the course of a calendar year. A week, under the Act, begins on Sunday and ends Saturday at midnight. The subject date would be a Saturday date.

Employment means that a person performs a service for remuneration. For a given week to count toward an employer's liability, service must be performed for remuneration during some portion of a day during that week. Additionally, weeks of employment do not have to be consecutive and the same person need not be employed. Liability, under the twenty weeks criteria, can occur before wages are paid. This happens most often with corporations who pay officers only once per year. In these situations it is proper to have a subject date earlier than the first wages date. For example, consider a corporation which employed only an officer. The officer performed services during each week of 2008, but was not paid until Dec 31, 2008. The corporation is liable for state unemployment taxes effective the twentieth week of employment and the subject date is May 17, 2008. Because wages were not paid until Dec 31, 2008 the first wages date is 12-31-08.

When making a determination using the twenty week criteria, be certain to verify that the employer indeed had twenty weeks of employment. Often an employer will miscount the twenty weeks and only have nineteen weeks of employment. Other times an employer will count twenty weeks from one year into the next. This is not correct. Under the twenty weeks provision, the twenty weeks of employment must be in the same calendar year.

Services performed during the first six days of a year count toward an employer's liability for that year, even if the week in question began during the previous year. Consider an employer who had employment on Jan 2, 2008. Jan 2, 2008 is part of a week which began on Dec 30, 2007. Under the twenty weeks criteria, employment on Jan 2, 2008 constitutes one week of employment for 2008.

If the twentieth week of employment is split between one year and the next, service must be performed on one of the days within the concerned calendar year for it to count as a week of employment. If the employment does not fall within the concerned calendar year, the employer does not have twenty weeks of employment. For example, consider an employer whose twentieth week of employment occurs during the week ending Jan 5, 2008. This week begins on Dec 30, 2007 and ends on Jan 5, 2008. For the week to constitute employment for 2007, some service must be performed on Dec 30 or 31.

When assigning liability to an employer under the twenty week criteria, the first chargeable quarter and the subject date can, sometimes, be in the same quarter. For details regarding this special situation, refer to Chapter 1: "First Chargeable Special Situation".

To classify an account liable under section 201.021 using the STA screen:

Key ACCT

Press <Enter>

The record for the account will display.

Key TYP

If the federal identification number, phone number or styling need changes:

Key FEID
        PHONE

        Line 1
        Line 2
        Line 3
        Line 4
        Line 5
        Line 6

Key TYP

        REG CODE  => 1
        DOM CODE => 2
        AGR CODE  => 2

Key SECT => 1

        SUBJ DT
        1ST TX WG
        1ST CHG

If the account was set up on the basis of an Employer's Quarterly Report, send an FL-160 letter.

Key  FORM LETTER => 160

Key  RPTS YY

Press <Enter> to verify the first chargeable quarter.

Press <PF5> to add the record.

Note: Pressing <PF5> before pressing <Enter> will add the record without verifying the first chargeable quarter.

[ 1.3.6.1 - Guidelines for the STR Screen ]

The STR Screen is to be used when there are more than three calendar years of quarterly reports (12 quarters) to be coded for an employer's account. The STR should be used in conjunction with the keying of liability information on the STA Screen.

The only fields to be keyed on the STR are:

1. The employer's account number.
2. Quarterly report grid (with up to six years of coding).

All coding must be done on the STR screen; DO NOT key part on the STA Screen and part on the STR. (If this is done, the computer will only read the coding on the STA and not on the STR).

DO NOT use the STR screen if letters need to be ordered on the STA screen. Use a C-10.

Do not use the STR screen when the transaction involves a predecessor or successor. The computer will go to STR and extract the coding and will not return to STA (predecessor/successor fields). Use a C-10.

To access the screen key in STR on the Employer Master File (EMF) command (CMD) line.

Use the following guidelines when keying information on the STR Screen:

1. Coding should be keyed in chronological order (keying ONLY the last two-digits of each year. Example: 06, 07, 08, 09, etc.). If the first taxable wage date is more than six (6) years ago, only six (6) years of coding should be keyed. Those six (6) years must end with the current year. After keying all information, press <PF5> to enter the data.
   
   
2. Once <PF5> has been pressed, the information on the STR cannot be recalled.