If a company in Ohio has employees in Ohio plus one employee in Indiana and that employee in Indiana is fired, what happens with that employee’s unemployment? Who pays it?
The Ohio company pays Indiana unemployment insurance rates based on a percentage times the payroll for the eligible employee. Without an eligible employee, what is there to pay?
Any ideas?
I’m no expert, but my WAG would be that it depends on where the employee physically worked. To use your example, if he lived in Indiana and commuted to Ohio then unemployment taxes would be paid to Ohio and his benefits would come from Ohio. If he lived and worked in Indiana but the company was in Ohio, then I would say that the company would pay unemployment tax in both states and the benefits would come from Indiana.
I base this assumption on the way it works for big comapnies with operations in multiple states. I worked for a national company which was headquartered in North Carolina. When I was “downsized” my unemployment benefits were paid by Georgia, my state of residence and employment, even though I worked for a North Carolina company.
We once wanted to retain, as a telecommuter, an employee who was moving to a state where we had no corporate presence. She could easily have done her job from there, but HR would not approve the arrangement since we were not already set up to pay unemployment taxes in her destination state and they didn’t want to set it up for 1 employee.
AFAIK, the state in which the employee lives (Indiana) will end up paying the unemployment insurance due the employee. That’s why the company (in this case) paid unemployment insurance to Indiana to begin with; once that employee is terminated, the company no longer has any employees in Indiana and would NOT be liable for futher unemployment insurance payments to Indiana.
No, when I went through that painful process several years ago it was made clear to us that unemployment compensation is paid by the state the insurance was paid to, which is the state where the employee worked, not lived. In this case, the worker would file in Ohio.
Hmmm, I made the assumption (not a good thing!) that the employee who lived in Indiana also worked in Indiana for this company. It never occurred to me (and it should have!) that the Indiana resident actually commuted to Ohio to work.
My mistake if my assumption was incorrect, and accordingly, my apologies.
To clear up any confusion (sorry about not saying it in the OP), yes, I’m talking about a person who works in Indiana but whose company is in Ohio.
I just thought a state might have some sort of contingency plan if a company pull out of their state, leaving behind unemployed workers.
Things may have changed in recent years, but this wasn’t our experience. Papa Zappa worked in Washington DC, for a Maryland-based company, but we lived in Virginia. Virginia paid his unemployment.
There’s also a federal component - as a household employer I have to pay both Federal and state unemployment taxes for our nanny. But AFAIK there’s no federal “unemployment office” - does anyone have any clue what that’s about?
I also have a vague memory of having some small deduction taken out of my paycheck during a stint of commuting to Manhattan years ago - I lived in Virginia, but for 2 years worked on a project in New York so had to pay income taxes there. It wasn’t a huge amount but it was odd having to pay that, when I’d never before or since been asked to pay unemployment myself.