CPS Risk Assessment & Underwriting 3

Question 1

A state unemployment insurance (SUI) experience rate for an employer is primarily determined by:

Accepted Answer

The ratio of benefits charged to the employer's account versus taxable wages

Answer

SUI experience ratings compare benefits charged to an employer's reserve account against their taxable payroll to calculate their individual tax rate.

Question 2

Which action best reduces an employer's long-term state unemployment insurance (SUI) tax rate risk?

Accepted Answer

Maintaining thorough termination documentation to contest unwarranted claims

Answer

Properly documented terminations for cause allow employers to successfully protest unwarranted UI claims, keeping their reserve account from being charged.

Question 3

What is the consequence of an employer failing to respond to a state unemployment agency's Request for Separation Information within the required timeframe?

Accepted Answer

Benefits are paid and the employer's account is charged without opportunity to protest

Answer

Non-response is treated as non-contesting, so benefits are awarded and the charge is applied to the employer's SUI account, raising future rates.

Question 4

An employer's SUI reserve balance turns negative. What immediate risk does this create?

Accepted Answer

The employer may be assessed at the maximum state UI tax rate

Answer

Negative reserve balance (benefit charges exceeding contributions) typically results in the employer being moved to the highest possible state UI tax rate.

Question 5

Which payment strategy can an employer use to voluntarily improve their SUI reserve balance and potentially lower future tax rates?

Accepted Answer

Making voluntary contributions to the state UI trust fund

Answer

Many states allow voluntary contributions to an employer's UI reserve account to improve the reserve ratio and qualify for a lower experience-rated tax rate.

(CPS) Certified Payroll Specialist Practice Test

(CPS) Certified Payroll Specialist Practice Test

CPS Risk Assessment & Underwriting 3