1. Experience Year - the four consecutive calendar quarters from July 1 of any year to June 30 of the next year.

2. Calendar Quarter - one of the four periods in a year ending March 31, June 30, September 30, and December 31.

3. Taxable Wage Base - the wages, subject to unemployment insurance tax, paid to covered employees in any calendar year.

4. Employee's Benefit Wages - wages earned by an employee during the base period.

5. Employer's Benefit Wages - the total of all employee benefit wages paid by an employer during any experience year.

6. Rehire Credit - a reduction in an employer's benefit wage charges resulting from the rehire of an employee during a claim benefit year before more than 75% of the total benefits to which such employee was entitled to receive have been paid.

7. Benefit Wage Ratio - the percentage obtained by dividing the total benefit wages, minus rehire credits, for the three most recently completed experience years by an employer's total payroll subject to assessments for the same three experience years, as shown on his quarterly assessment reports.

8. State Experience Factor - total benefits paid from the Delaware U.I. trust fund during the last three experience years, divided by the total benefit wages of all employers for the same three years.

9. Basic Assessment Rate - an employer's rate for any calendar year is determined on the basis of his benefit wage ratio as of June 30 of the preceding calendar year.

Determination of Benefit Wage Charges, Rehire Credits and Tax Rates

If there is more than one liable assessed employer in a claimant's base period, each base period employer will be charged the amount of benefit wages paid to the claimant by that employer during the claim base period. Each base period employer will be liable to receive a maximum benefit wage charge up to the taxable wage base. If a base period employer, who is not the last employer, has paid for part-time employment during the base period and continues to give the employee employment to the same extent while the individual is receiving benefits as was given during the base period, no benefit wages will be charged to the part-time employer. Employers will also not be charged if they can prove to the satisfaction of the Division that the employee was terminated for "just cause" or left voluntarily without good cause attributed to such work.

Employers will be notified quarterly on Form UC-12 (Notice of Benefit Wages Charged to Employer's Merit Rating Account) of any benefit wages charged to their accounts or relief of any benefit wages previously charged.

Assessments payable by employers cannot be deducted from the wages of employees.

Here is a calculation of an employer's benefit wage ratio.

If the wage records looked like this:

Using the tax table for calendar year 2002 with a State experience factor of 39, this employer's effective assessment rate for calendar year 2002 would be 2.6% (a basic rate of 2.4% plus a 0.2% supplemental assessment rate).

As may be seen by examining the ratio, the larger the payroll, i.e., the bigger the business, the smaller the effect of one more employee collecting U.I. benefits as opposed to a smaller business where the ratio will be increased by a greater amount.

An employer's basic assessment rate is determined by locating the employer's benefit wage ratio and the State experience factor in the following tables, Exhibits 1-8. (See Appendix II). For tax years prior to calendar year 1988, a supplemental assessment rate of 1.5% was added to the basic assessment rate to obtain the effective assessment rate.

Section 3350(9), Title 19, Delaware Code as amended in June 1987, in June 1989, in June 1995, in June 1997, in June 1999, and again in July 2001, provides a variable supplemental assessment determined by an employer's basic rate.

When the Unemployment Insurance Trust Fund is equal to or greater than $300 million, assessment rates will be determined as follows:

When the Unemployment Insurance Trust Fund is equal to or greater than $250.0 million, but less than $300.0 million, assessment rates will be determined as follows:

When the Unemployment Insurance Trust Fund balance is equal to or greater than $215.0 million, but less than $250.0 million, assessment rates will be determined as follows: 

When the Unemployment Insurance Trust Fund balance is equal to or greater than $200.0 million, but less than $215.0 million, assessment rates will be determined as follows: 

If the Unemployment Insurance Trust Fund balance is equal to or greater than $130.0 million, but less than $200.0 million, assessment rates will be determined as follows: 

When the Unemployment Insurance Trust Fund balance is equal to or greater than $90.0 million, but less than $130.0 million, assessment rates will be determined as follows: 

Finally, if the Unemployment Insurance Trust Fund balance is less than $90.0 million, assessment rates will be determined as follows: 

Section 3350, Title 19, Delaware Code, as amended July 1, 1994 provides that an employer may apply for rehire credit against benefit wages charged to his experience rated account if:

1. the employer reemployed a claimant during the claimant's benefit year and because of such reemployment, prevented the payment of more than 75% of the maximum benefits to which said claimant was entitled to receive during the benefit year,

2. base period wages (stated as benefit wages on the quarterly benefit wage charge notice, Form UC-12) upon which the claim was based were charged to the employer's experience rated account during the benefit year just ended,

3. the employer applied for rehire credit within ninety (90) days following the end of a claimant's benefit year ending date.

Pursuant to an amendment to Section 3350(7), Title 19, Delaware Code, effective for rehire credit applications filed on or after July 1, 1995, employers may be eligible to receive rehire credits based on benefits paid on claims for partial unemployment insurance benefits.

A signed application for rehire credit must be made on Form UC-400 (Application for Rehire Credit). No rehire credit can be applied for prior to the end of the claimant's benefit year. Applications for rehire credit not filed within 90 days will be denied.

Application forms (UC-400) may be obtained from the Department of Labor by writing to the Division of Unemployment Insurance, P. O. Box 9953, Wilmington, Delaware 19809-0953. Form UC-400 should be completed from your records. 

Rehire credit may be granted for an amount of 25%, 50%, or 75% of the original charge depending on the balance remaining in the claimant's benefit account when his benefit year ends. The credit will be applied in the calendar year and quarter in which the claimant's benefit year exhausted. Credit is NOT retroactive to the period in which the benefit wages were charged or rehire occurred. If an application for rehire credit is denied, the employer will be notified of the reason on Form UC-409RC (Notice of Denial of Application for Rehire Credit). If the credit is allowed, the employer will be issued a Statement of Benefit Wage Credits (Form UC-401).

A transfer of employment and benefit wage experience from a predecessor to a successor employer, shall be required if there is a "substantial continuity of ownership and management" after the transfer. Any employer determined to be a "reorganized" employer as defined in Regulation 39, shall be required to retain the assessment rate and be liable for all assessments, interest, and penalties owed by the employing unit before reorganization. Such transfers are considered "mandatory transfers".

A transfer of employment and benefit wage experience from a predecessor to a successor employer may be approved, upon request by the successor employer, if there is a continuation of essentially the same business activity as the predecessor employer. Such a transfer is considered a "voluntary transfer".

The Department of Labor shall prescribe the evidence required to prove that the new owner (successor employer) is entitled to the experience of the predecessor employer. Upon the transfer of employment and benefit wage experience, the successor employer receives the taxable wage and benefit charge experience of the predecessor. The successor employer's rate may be affected by the monetary and/or report delinquency of the predecessor and by current and future charges to the predecessor account.

To request a "voluntary transfer", the successor employer must file an Application of "Employment Experience" of Predecessor in Connection with Determination of Assessment Rate of Successor (Form UC-411).

The effective date of transfer of employment and benefit wage experience for both mandatory and voluntary transfers is the date of liability of the successor employer subsequent to the acquisition of the successor employer as determined by the Department in accordance with Section 3302(8), Title 19, Delaware Code. However, for a voluntary transfer of employment and benefit wage experience to be effective as of the date of liability of the successor employer subsequent to the acquisition of the predecessor employer, the successor employer must file a Form UC-411 with the Department for such a transfer within 30 days of the date of acquisition of the organization, trade, or business or substantially all the assets of the predecessor employer. If the successor employer files for a voluntary transfer of employment and benefit wage experience after the required 30 day period, the date of transfer of employment and benefit wage experience will then be the first day of the first month of the quarter following the quarter in which the application for a voluntary transfer was received by the Department.

All employers are notified of their rate of assessment for each calendar year by the Unemployment Insurance Division. This determination becomes conclusive and binding within fifteen days after the mailing of the notice unless the employer files an application for review and redetermination by writing to the Division.

Under the provisions of Chapter 23 of the Internal Revenue Code, a tax is levied on employers covered by FUTA, as noted in Section IV of this handbook, by the Federal government at a rate of 6.2% on the taxable wages paid to an employee in any calendar year. The law, however, provides a credit of up to 5.4% toward the Federal tax liability to employers who pay State U.I. taxes timely under an approved State unemployment insurance program. This Federal tax is used to pay administrative costs, both State and Federal, associated with unemployment compensation programs.

Section 3401(b), Title 19, Delaware Code, provides for a fifteen one-hundredths of one percent (0.15%) per year tax on liable employers on wages subject to Unemployment Insurance taxes whenever Delaware's UI Trust Fund balance is equal to or greater than $215.0 million. Should the fund balance be less than $215.0 million, the training tax assessment will be one-tenth of one percent (0.1%). The funds are used to provide industrial training or retraining for dislocated workers, school-to-work transition services, and career ladder training for State employees. Training tax bills are mailed to employers on a semi-annual basis. Interest may accrue and be collectible on all unpaid training tax assessments at the same rate applied to delinquent unemployment insurance assessments.