This employer handbook explains the Iowa Unemployment Insurance (UI) Program and the taxing procedures for employers.

This handbook is for informational purposes only and does not contain legal advice or have the effect of law or regulation. It is intended to be an introduction for employers to the general procedures under the Iowa UI Program. You should consult legal counsel for specific legal problems under the Iowa Employment Security Law.

Release of Information

Information obtained by Iowa Workforce Development (IWD) UI Division from any employing unit is strictly confidential and is not published or open for public inspection. Information in the possession of IWD that may affect a change in an employer’s account is made available to the affected employer and the employer’s designated legal representatives.

Confidentiality laws prevent IWD from discussing employer account specifics over the phone without verifying the caller’s identity. Callers will need to be able to answer questions regarding detailed information contained within an employer’s account before information is provided by the agency.

Individual information collected from employers by IWD UI Division will be released to employers and employer’s designated legal representatives upon request, and may also be provided to various federal and state agencies as required or permitted by federal and state law.

It should be noted that the case file and decision resulting from any appeal before the Department of Inspections and Appeals administrative law judge becomes public record.

Iowa's Unemployment Insurance Program at Work

The Iowa Employment Security Law, governing legislation for the state’s UI Program, benefits both the state and its citizens. It provides benefit payments to qualified individuals who are temporarily unemployed to help them meet expenses that cannot be delayed. Maintaining the purchasing power of jobless individuals also has a stabilizing influence on the state’s economy.

The law restricts payment of UI benefits to only those who are unemployed or working reduced hours through no fault of their own.  They must be able to work, available for work, and actively searching for work.

Employers do not make any deductions from the employee’s paycheck to fund UI benefits. Benefits are paid from a fund exclusively supported by a payroll tax levied on Iowa employers. The tax varies for employers and is primarily dependent on two factors:

1. how the employer’s employment history compares to that of all other employers who are participating in the UI program
2. overall fiscal condition of the UI Trust Fund

As part of IWD, the UI Division administers the state and federal UI programs. The UI Division is responsible for the maintenance of the UI Trust Fund which is UI contribution payments collected from employers.

 

The Iowa Employment Security Law defines an employing unit as an individual (sole proprietor) or type of organization that currently has or previously had in its employ one or more individuals performing service within Iowa. Legal entities based in Iowa, such as a corporation, limited liability company and limited liability partnership must be registered as such with Secretary of State.  The legal business name registered with IWD must exactly match SOS records.

An employing unit includes any:

• corporation (domestic or foreign) or insurance company
• limited liability company
• sole proprietor
• partnership
• a state or local government
• trust/estate
• a receiver or trustee in bankruptcy
• association
   

Employer Responsibilities

Within 30 days of hiring employees for the first time in Iowa or acquiring an existing business, all employing units must register with Iowa Workforce Development (IWD) at www.myIowaUI.org.  Based on the information provided, you will find out if you are a liable employer and are required to pay Unemployment Insurance (UI) contributions.  Out-of-state employing units must register for a UI tax account as soon as wages have been paid to an employee working in Iowa.

myIowaUI - Iowa's Unemployment Insurance Online Tax System

myIowaUI is IWD’s secure online tax system for employers, accountants, and other third-party filers to manage their UI tax accounts.  The system allows you or your third party filer to:

• register a new business electronically
• submit quarterly reports electronically
• calculate taxable wages and contributions due
• schedule payments
• submit wage adjustments
• view historic account information
• view and update account information
• receive and view electronic correspondence
• assign agent and roles (employer only)
   

myIowaUI - Employer Account Information

To protect your rights and to avoid any possible penalties and interest for late filing, it is your responsibility to ensure that all employer contact information is accurate and up to date. This includes reporting unit(s).  You can update account information at www.myIowaUI.org.

Payroll Records

If you hire individuals in Iowa, it is your responsibility to maintain accurate payroll records. The records must include the total number of employees as well as the following information for each:

• name
• Social Security Number
• days and calendar weeks worked
• earnings for each period employed

You are required to keep the records for a minimum of five years after the calendar year in which the wages were paid. If you have more than one physical location, the records must be maintained by location.

Employer's Contribution & Payroll

• if your business is found liable, you must submit your wage detail and make a payment electronically each quarter
• the quarterly filing is still required even when you have no employment in a specific reporting quarter
• the quarterly report has the following functions:
  • provides a record of wages you paid each individual worker (wages paid are essential to determine the individual employee’s eligibility for UI and to calculate his/her UI weekly benefit amount)
  • calculates the total wages and taxable wages you paid during the quarter (taxable wages paid are a prime factor in determining your UI tax rate)
  • electronically submits your Multiple Worksite Report if you file wages by reporting unit
• you can make corrections and/or adjust individual wage lines at www.myIowaUI.org
   

Reporting Your Employees

• generally wages for UI purposes are reported to the state in which work is performed
• if an employee works exclusively in one state, that is the state to which unemployment tax is reported
• if an employee is a multi-state worker, working in two or more states during a calendar quarter, the employee is reported to the state where their base of operations is. Where an employee starts and finishes their work on a regular basis is their base of operations
• if an employee moves from job site to job site and there is no base of operations, the employee should be reported to the state where they receive their direction and control
• if the employee has no base of operations or the place where services are directed and controlled is not applicable, the employee should be reported to the state where they live provided that they perform some service in that state

If an employee has been permanently transferred to the state of Iowa from another state, report the employee to the other state for wages paid before the transfer and report the employee to Iowa for wages paid after the transfer. If the transfer occurs during the middle of the year, you may use the taxable wages reported to the other state before the transfer to determine the Iowa taxable wages after the transfer.

Sell, Transfer Or Discontinue Your Business

You must update your account information at www.myIowaUI.org or file an Employer's Notice of Change form at the time of the status change.

 

Determining Your Liability

A liable employer is an employing unit that is required to report wages and pay Unemployment Insurance (UI) contributions to Iowa Workforce Development (IWD) UI Division. There are three classifications of liable employers:

1. wages paid and business type
2. successorship
3. elective coverage

Information regarding these classifications is provided in more detail below.  Part-time, seasonal or temporary employees are counted the same as full-time employees.

Note: Officers of a corporation are included as employees if they perform services.

Wages Paid and Business Type

Your employing unit becomes liable if it meets any of the following criteria.  Liability is retroactive to the first quarter wages were paid.

Wages paid

• paid wages in any calendar quarter in either the current or preceding calendar year for service in employment

Non-Profit Organizations - 501(c)(3)

• religious, charitable, scientific, literary, educational, or organizations working for the prevention of cruelty to children or animals
• paid wages in any calendar quarter in either the current or preceding calendar year for service in employment
• may request a reimbursable status to reimburse the Iowa UI Trust Fund for any UI benefits paid rather than paying a contribution into the Fund (this status remains in effect a minimum of 2 years)
• you must have a 501(c)(3) Internal Revenue Service tax exempt letter to request a reimbursable status
• refer to section 96.7.8 of the Iowa Code for additional information about reimbursable status

Agricultural Laborers

• paid gross wages of $20,000.00 or more to agricultural laborers in any quarter of the current or previous calendar year
• employed 10 or more employees in some portion of a day in 20 separate weeks in the current or previous calendar year

Domestic Employees

• paid wages of $1,000.00 or more to domestic employees during any calendar quarter in the current or previous calendar year

Government Entities

• cities, counties, school districts, townships and community college districts are required to reimburse IWD for any UI benefits paid
• these entities can elect to pay contributions if the election is made within the time specified by law
   

Successorship

• you become liable for UI contributions on the date you acquire all or part of another existing employer’s business that is liable prior to the acquisition
• it is the buyer's responsibility to obtain information regarding the UI contribution rate, debt and future benefit charges, as all or part of the account experience may be transferred to the acquiring employer's UI account
• after acquiring a business, you should make a formal and specific offer of work to each employee of the former owner you wish to retain
• the offer should outline duties, pay rate, work days and work shift
• please report any refusals by completing the Notice of Separation or Refusal of Work web form
• if the seller fails to disclose information to the purchasing employer about UI benefits charged to their account, they are liable for actual damages and attorney fees to the acquiring employer

Elective Coverage

• an employing unit that does not meet UI liability may elect to become liable
• this allows your employees to be covered under the Iowa Employment Security Law and receive UI benefits, if eligible
• you become liable for contributions based on the effective date in the application
• the election is valid for a minimum of two years
  • you may cancel by submitting your request in writing by February 15th following the year in which you wish to end your election
• please complete and file the Voluntary Election to Become an Employer form for elective coverage
  • if you don't have employees, complete and file the Voluntary Election to Constitute Services form also
• IWD’s UI Division will review the form and determine if you qualify

Excluded Services and Wages

Common exclusions when counting employees and determining if the wages are reportable include:

• individual owner of a business (sole proprietor)
• partners of a partnership
• limited liability members are excluded if paid in proportion to ownership interest
• family employment
  • father or mother working for a son or daughter
  • husband or wife working for his or her spouse
  • children under 18 years of age employed by a father or mother
  • the exclusions can apply to a partnership if an exempt family relationship exists between the employee and each of the partners

Note:  Family employment exclusions apply to an individually owned business and not to a corporation or a limited liability company.

• sick or disability pay if payments are made under an employer plan that applies to its employees generally or to a class of employees
• services when employed by a school, college, or university by a student who is enrolled and regularly attending classes, and/or services performed by the student’s spouse hired under a program to provide financial assistance (the spouse is advised of the fact at the time of hire)
• services performed by a student for an employer as a formal and accredited part of the curriculum of the school
• services when employed by a church, convention or association of churches, or organization which is operated, supervised, controlled, or principally supported by a church, convention or association of churches, which is operated primarily for religious purposes (example: the service of a janitor in a church is excluded, but the service of a janitor for a separately incorporated college which is not operated primarily for religious purposes, although it may be church related, is covered employment)
  • services performed by ministers and by members of religious orders (in the exercise of their ministry) in performing the duties required by their orders
     

Employer Audits

The United States Department of Labor requires Iowa Workforce Development (IWD) to perform an Unemployment Insurance (UI) tax account audit on a percentage of Iowa employers each year.  The audits are conducted to ensure compliance with the provisions of Iowa Code, Section 96.11.6(a) and Iowa Administrative Code 871, Chapter 22.17(4).  This requirement results in several thousand Iowa employers being selected for a UI tax account audit each year.

Businesses with or without an active UI account may be selected for an audit to determine if they are a liable employer.  Under Iowa law employers are required to provide records for examination as defined in Iowa Administrative Code 871 Chapter 22.17(2).  

Field auditors are assigned to specific territories throughout Iowa. Territories are assigned based on mailing address ZIP code on the employers' account. Employers can contact the field auditor assigned to their account for any questions. 

Misclassification of Workers

It is critical that business owners correctly determine whether the individuals providing services are employees or independent contractors.

Generally, you must withhold income taxes, withhold and pay Social Security and Medicare taxes, and pay unemployment tax on wages paid to an employee. You do not generally have to withhold or pay any taxes on payments to independent contractors.

Intentional misclassification constitutes tax and insurance evasion. Employers misclassifying their workers may face the following consequences:

• penalties and fines
• interest on back taxes
• criminal charges under various laws​

 For more information or to report suspected misclassification of workers, go to www.iowaworkforcedevelopment.gov/misclassification-workers-iowa.

Appealing Your Unemployment Tax Decision

Employers who do not agree with a UI tax decision may file an appeal and present testimony and documents to an administrative law judge.  The appeal must be submitted in writing and filed within 30 days of the decision date.  The decision will be final if you do not file an appeal.  Your appeal must be in writing and mailed, emailed or faxed to:

Iowa Workforce Development
Unemployment Insurance Tax Bureau
1000 East Grand Ave.
​Des Moines IA 50319-0209

Email: iwduitax@iwd.iowa.gov

Fax: 515-242-5247

The appeal must also include:

• company name, address and Iowa UI account number
• decision date
• a statement that you are asking for an appeal
• your reason for appealing

You must report your employees' wages on a quarterly basis.  If your appeal is on time, payment of the computed contribution is not an agreement to the amount owed.  If you lose your appeal, you may request a waiver of interest.

Once the appeal is scheduled, you will receive further communication from the Division of Administrative Appeals including an appeal packet, date and time of appeal and instructions for participation.

 

Employer’s Account

• unemployment insurance (UI) tax payments are deposited into the UI Trust Fund
• your account is credited with your tax payment
• your account is charged for all regular UI benefit payments and 50 percent of extended benefit payments to former employees that are qualified 
• charges to your account are used to determine your rate
   

North American Industry Classification System (NAICS)

• each UI account is assigned a NAICS classification based upon the activities in which they are primarily engaged
• NAICS is a comprehensive system covering the entire spectrum of economic activities, both producing and non-producing
• NAICS uses a six digit numerical coding system to identify particular industries and their placement in the classification system compared to all other North America industries
• State Unemployment Tax (SUTA) uses this classification process to determine if an employer is considered a construction industry or non-construction industry
• your myIowaUI account homepage lists your NAICS classification
• complete NAICS information can be found at https://www.census.gov/eos/www/naics
   

Tax Rate Tables

UI contributions may be collected from employers under eight different tax rate tables, each table having 21 ranks. Rates vary from 0.000 percent to 9.000 percent on Table 1 and from 0.000 percent to 7.000 percent on Table 8. (This means that Table 1 collects the most and Table 8 collects the least tax).

The tables were established to help maintain the solvency of the UI Trust Fund.  As such, a formula in the law mandates movement to a table that collects more revenue when the balance in the UI Trust Fund is low and movement to a table collecting less revenue when the balance is high.

The rate table in effect for any given year is applicable to all participating employers. The rate table in effect for all private employers for 2020 and 2021 is Contribution Rate Table 7.

New Employers

• new non-construction employers are assigned the rate from Rank 12 of the table in effect, or 1.000 percent, whichever is higher
  • for 2021, the rate is 1.000 percent 
• new construction employers are assigned the rate from Rank 21 of the table in effect
  • for 2021, the rate is 7.500 percent
• once you are eligible you will receive a computed UI Tax Rate
   

Determining Each Employer’s Benefit Ratio

In addition to mandating the tax table in effect, the Iowa UI law provides a formula for determining the tax rates of individual employers.

In the benefit ratio system two factors are calculated. An employer’s five-year average annual benefit payment is divided by the employer’s five-year average annual taxable payroll. The result is benefits expressed as a percent of taxable payroll, or a benefit ratio. Each employer’s benefit ratio is then compared to every other employer’s benefit ratio in a ranking or array system. Those with the lowest benefit ratio receive the lowest tax rates.

Ranking Employers by Benefit Ratio

Your rank is determined by how your benefit ratio compares to the benefit ratios of other employers. 

Each employer’s rank is calculated by listing their increasing benefit ratios from the lowest benefit ratio to the highest benefit ratio. Next, employers are divided into 21 groups or ranks. Each of the 21 ranks contain approximately 4.76 percent (or 1/21) of the total taxable wages reported by the same employers for the four calendar quarters immediately preceding the rate computation date (July 1). Currently, approximately 44 percent of Iowa’s ranked employers have a 0.000 percent rate.

Applying the Rate Table to the Rankings

• your Notice of Tax Rate is sent in November of each year for the following tax year
• employers whose benefit ratios place them in Rank 1 are assigned the corresponding Rank 1 rate from the rate table 
• likewise, employers in Rank 2 are assigned the corresponding Rank 2 rate, etc. until all employers have been assigned rates
• refer to your Notice of Tax Rate for a breakdown of your quarterly taxable wages and benefit charges 
• for Federal 940 Certification purposes, the State Experience Rate indicated on the Notice of UI Tax Rate is the State Experience Rate as defined on the federal form 940

Appealing Your UI Tax Rate

Employers who do not agree with an unemployment tax rate computation may file an appeal. The appeal must:

• be filed within 30 days of the rate notice date
• include the employer's unemployment insurance account number
• state it is an appeal
• provide the grounds for the appeal

Grounds may include an error in the rate, a favorable claims decision issued since the rate computation date, or that you expect to receive one on an appeal in progress. Grounds do not include fairness or financial hardship as we can not reduce rates that are correctly calculated. Your appeal must be in writing and mailed, emailed or faxed to:

Iowa Workforce Development
Unemployment Insurance Tax Bureau
1000 East Grand Ave.
Des Moines IA 50319-0209

Email: iwduitax@iwd.iowa.gov

Fax: (515) 242-5247

Once the appeal is scheduled, you will receive further communication from the Division of Administrative Appeals including an appeal packet, date and time of appeal, and instructions for participation.

Taxable Wage Base

• the taxable wage base is the part of an employee’s wage upon which the employer must pay UI taxes
• the taxable wage base in Iowa is the greater of these two formulas:
  • two-thirds of the statewide average weekly wage multiplied by 52 or
  • the taxable wage base for the Federal Unemployment Tax Act (FUTA)
• you pay UI tax on each employee's wages up to the taxable wage base (you do not pay tax on wages exceeding the taxable wage base)
  • the taxable wage base in 2020 is $31,600.00
  • the taxable wage base in 2021 is $32,400.00
     

Charging Employer Accounts for Benefits Paid

Benefit paid on a UI claim are generally charged to the accounts of the claimant's base-period employers. The most recent base-period employer is charged first with benefits paid until the wage credits are exhausted. Once wage credits are exhausted from the most recent base-period employer, charges go the next most recent employer and so on.

The base-period is a four quarter (one year) time frame using the first four of the last five completed calendar quarters at the time an initial UI claim is filed. The diagram below identifies how to determine the base period. For additional information, please refer to the Unemployment Insurance Benefits Handbook. 

Notification of Benefits Paid and Charged to Employer’s Account

Statement of Charges

Within 40 days after the close of each calendar quarter, IWD sends each contributory employer a Statement of Charges listing the UI benefits paid to former employees and charged to the employer’s UI tax account.  

This statement is sent for informational purposes and is not a bill. In order to compare this statement to your annual Notice of Tax Rate, you should retain it for five years. You are given 30 days from the date the Statement of Charges was sent to file an appeal of any charges that are shown on the statement. Instructions for appealing are on the back of the statement.

Statement of Amount Due

If your account carries an outstanding balance, you will receive a monthly Statement of Amount Due. Interest will continue to accrue daily on contributions due until the amount is paid in full. Failure to pay may result in further collection action such as: Jeopardy Assessments, Liens, Distress Warrants, Garnishments, Injunctions and/or taking an offset from payment due to you from the State of Iowa or the Internal Revenue Service. If you are unable to make payment in full, contact UI Tax Collections to see if you qualify for a payment plan.

Notice of Reimbursable Benefit Charges

Within 30 days after the close of each calendar quarter, IWD sends each reimbursable employer a Notice of Reimbursable Benefit Charges listing the UI benefits paid to former employees and charged to the employer's UI tax account.  

This notice is sent for collection purposes. Payment in full is due within 30 days of the date the notice is sent to avoid interest. If the amount due is not paid within 30 days, interest will accrue at the rate of 1 percent per month on the remaining balance until paid in full (1/30 of 1 percent per day). 

You are given 15 days from the date the Notice of Reimbursable Benefit Charges was sent to file an appeal of any charges that are on the notice. Instructions for appealing are on the back of the notice.

Federal Unemployment Tax Act

• most private employers covered by the Iowa UI Program are subject to the Federal Unemployment Tax Act (FUTA)
• you can receive a maximum credit equal to 5.4 percent against this tax if you are participating in a state UI program that meets federal requirements.
• the FUTA tax for 2021 is scheduled to be 6.0 percent on the first $7,000.00 of wages paid to employees
• due to the  ongoing solvency of the UI Trust Fund, the 5.4 percent credit is applied to all accounts, making the tax rate 0.6 percent on the first $7,000.00 of wages paid to employees
• the federal tax is allocated back to the states to pay costs for administering the law and provide funding for 50 percent percent of extended benefits (EB)
• any remaining funds are put in a federal loan account for states to use on a loan basis in the event their state benefit funds become depleted
• the State Experience Rate indicated on the Notice of UI Contribution Rate is the State Experience rate for federal form 940 certification purposes

 

Employer Notification to Employees of the Availability of Unemployment Compensation

Employers are required to inform employees about Unemployment Insurance (UI) benefits in order to ensure workers are aware of the benefits they may be eligible for if they become unemployed or experience a reduction in hours.  Workers who become unemployed may be eligible for UI benefits if they meet the requirements of state UI eligibility laws. Workers may file a UI claim in the first week that employment stops or work hours are reduced.

Employer Notification to Employees of the Availability of Unemployment Compensation Form

Notice of Claim to Employers

Any employer an individual worked for in the last 18 months may be charged for the individual’s UI benefits. Because of this, employers are able to protest the claim seeking relief from the benefit charges. The protest must be filed within 10 days after the Notice of Claim is sent to the employer. 

Fact-Finding Interview

If a claim is protested, IWD may schedule a fact-finding interview which will be conducted by telephone.

The individual and the employer will receive a Notice of Unemployment Insurance Fact-Finding Interview letter containing the scheduled date, time and the telephone number where the individual will be called for the interview. The notice contains complete instructions including what to do if the telephone number listed is incorrect. 

Note:  Employers who fail to participate in a fact-finding interview that results in an overpayment of claimant benefits will remain responsible for the benefit charges.

After the fact-finding interview, an eligibility decision will be mailed to the individual and employer. Either party can appeal the decision if they disagree. Appeal rights and instructions are included on the back of the decision notice.

You may find additional information on the appeal process at www.iowaworkforcedevelopment.gov/non-monetary-issues.

Tips for Appeal Hearings

• be prepared and familiarize yourself with the facts 
• stick to the pertinent facts, avoid irrelevant information
• do not interrupt the person testifying
• present any documents that are pertinent to the separation issue, such as time cards, payroll records, personnel records, prior warnings, etc
• do not totally depend on affidavits because the person who signed the affidavit is not available to be questioned or challenged
• present first-hand information for evidence, not hearsay (hearsay may be admitted but its reliability can readily be challenged)
• if you do not understand the questions, acronyms or legal jargon when questioned by the IWD representative or the administrative law judge, request clarification
• if you do not know something, simply say so (grasping for answers could affect your credibility)
• remember to register your telephone number and confirm participation in the scheduled hearing along with contact information for any witnesses. You can register and confirm your participation on-line at https://ia.c2tinc.com/register/  (the administrative law judge will not contact or include you in the hearing if you have not provided this information)
• your last chance to get evidence into the record is at the administrative law judge level
  • do not withhold evidence to use later because new evidence cannot be admitted after the appeal hearing 
  • if you want to present new exhibits or summary statements from the fact-finding interview to be included in the record of an appeal hearing, make the request early enough to allow the Appeals Section to mail copies to both parties
     

Supplemental Unemployment Benefit (SUB) Plans

If you would like to supplement unemployment benefits for your employees, a SUB plan may be an option for your business. You must pay into a separately established trust fund, or similar account, an amount per hour (or amount equivalent) for the employees covered by the plan. Your employees should provide proof of their eligibility for unemployment insurance (UI) benefits to receive SUB payments.

If you are considering the installation of a SUB plan, a copy of the plan should be submitted to Iowa Workforce Development (IWD) UI Division for approval prior to the effective date of the plan.

Extended Benefits

Extended benefits (EB) become effective in Iowa when the insured unemployment rate equals or exceeds an average of 5 percent for 13 consecutive weeks. Unemployed individuals who have exhausted all their regular UI benefits may be eligible to receive up to 13 weeks of additional payments through the EB program. In cases involving individuals of private contributory employers, EB is funded on a shared basis from the Iowa UI Trust Fund and from monies collected under the employer-financed Federal Unemployment Tax Act (FUTA). Governmental contributory employers are charged 100 percent of EB.

Due to our low unemployment rate, Iowa currently does not fall under a plan to pay EB.  

Voluntary Shared Work - Alternative to Layoffs

The Voluntary Shared Work Program (VSW) is Iowa's version of Short Term Compensation (STC).

The VSW program offers an alternative to layoffs of five or more workers and is an effective tool for Iowa businesses experiencing a decline in regular business activity. Under the VSW program, work reductions are shared by reducing employees' work hours and allowing employees to receive a fraction of regular UI benefits which is equal to the percent of their work hour reduction. By avoiding layoffs, employees stay connected to their jobs and employers maintain their skilled workforce.

To learn more about this program visit www.iowaworkforcedevelopment.gov/voluntary-shared-work-program.

 

Everyone is responsible for upholding unemployment insurance (UI) integrity. Individuals, employers and Iowa Workforce Development (IWD) staff are expected to act honestly and in good faith. Integrity helps IWD prevent errors, fraud and abuse by those who do not follow the UI rules.

Unemployment Insurance Fraud

Fraud is knowingly providing false information or withholding information to receive UI benefits. Fraudulently collecting UI benefits is a serious offense. It can lead to severe penalties, which include:

• criminal prosecution, fines and imprisonment
• denial of future benefits by administrative penalty
• repayment of fraudulently collected UI benefits, plus a 15 percent penalty and daily interest
• wage garnishments and liens
• interception of state and federal tax refunds

 IWD uses automatic wage cross match programs, claim audits and additional investigative tools to detect fraud. IWD also compares state and federal new hire reports to UI claims to ensure that individuals who have returned to work full-time are no longer collecting benefits and individuals who are working part-time are reporting correct earnings. Claim audits are also conducted to confirm work searches were completed for each employer listed on the work search record.

In addition, IWD has partnered with the Social Security Administration (SSA) in a program that verifies the identity of an individual who has applied for UI benefits. The claimant’s full legal name, Social Security Number, date of birth, and gender are cross-matched against the records of the SSA prior to any benefits being paid. 

Individuals who have received UI benefits fraudulently, and have outstanding fraud debt including penalty, interest and lien fees, are ineligible to receive UI benefits until the full amount of the debt is paid. Individuals cannot use weekly benefit payments to offset fraud debt. 

If an individual thinks they may have mistakenly reported incorrect information, they should contact IWD to correct the situation before an investigation begins. 

Quality Control Reviews

To ensure your UI account is being charged correctly, IWD randomly selects UI claims and benefit decisions each week for review to determine if benefits were accurately paid or denied. Selected individuals are required to participate in the review as a condition of continuing eligibility for UI benefits. A Notice of Selection, containing the date and time of the telephone interview with an auditor, is mailed prior to the review. Individuals will receive a questionnaire for completion prior to the telephone interview. Individuals must have a record of their work searches made for the week under review, as the auditor will verify the work search with the employer(s). Refusal to cooperate with the auditor will result in a denial of UI benefits.

 

Key Points

• register with Iowa Workforce Development (IWD) on-line at www.myIowaUI.org within 30 days of hiring employees for the first time in Iowa or acquiring an existing business
• keep contact information current on your on-line UI account for tax and benefit correspondence
  • if a third party is used, the agent must be assigned as a Power of Attorney or Authorized Representative with specific roles they are authorized to perform
• avoid penalties by filing your contribution and payroll reports on time
• make timely payments to avoid interest charges
• report all newly hired and rehired employees to the central registry at https://secureapp.dhs.state.ia.us/epay
• report suspected misclassification or UI fraud at www.iowaworkforcedevelopment.gov/report-fraud
  • provide any information that can help in the investigation to determine if UI benefits have been fraudulently claimed
• review quarterly charge statements or billing notices for inaccuracies or suspicious activity
• promptly notify IWD by completing the Notice of Separation or Refusal of Work on-line web form at https://uiclaims.iwd.iowa.gov/EmployerSeparation when an individual is separated from your employment
• complete the Notice of Claim and send to IWD within 10 days from the date of mailing as indicated on the form if you wish to protest a UI claim
• promptly respond and provide accurate information to IWD when requested
   

Additional IWD Services

For more information about employer requirements for both the Federal Worker Adjustment and Retraining Notification (WARN) Act, and the Iowa Layoff Notification Law, go to www.iowaworkforcedevelopment.gov/business-closure-and-layoffs.

Labor Market Information (LMI)

LMI collects, analyzes and prepares a wide array of labor market data including: employment, industry and occupational statistics, wages, projections, trends and other workforce characteristics.

Additional information is available at www.iowaworkforcedevelopment.gov/labor-market-information-division.

Work Opportunity Tax Credit (WOTC)

WOTC is a federal tax credit available to employers who hire eligible individuals from target groups with significant barriers to employment.  WOTC reduces an employer’s cost of doing business by decreasing their federal income tax liability depending on the target group identified and hours worked during the first year of employment.  Employers can claim the WOTC on an unlimited number of qualified employees each year. 

Additional information is available at Work Opportunity Tax Credit (WOTC) information. 

Employers Council of Iowa (ECI)

The ECI is an advisory group, located in each IWD region and offers no-cost membership open to all businesses in the community. Its purpose is to guide IWD’s business focus, address topics of concern to employers, sponsor training initiatives, and assist IWD in meeting critical human resource needs. 

Additional information is available at www.iowaworkforcedevelopment.gov/employers-council-iowa.

Federal Bonding

IWD administers the Federal Bonding Program, sponsored by the US Department of Labor.  The program’s fidelity bonds benefit the employer by offering bond coverage provided at no cost.  The bond coverage is in effect the day the new employee begins working and lasts for six months.  The employer profits from the worker’s skills and abilities without taking the risk of potential theft or dishonesty.  There are no documents to sign or paperwork to complete.  The bond has no deductible and reimburses the employer for any loss due to employee theft within the specified six-month period.

Additional information is available at www.iowaworkforcedevelopment.gov/federal-bond-program.

Registered Apprenticeship

The Registered Apprenticeship system provides opportunity for workers seeking high-skilled, high-paying jobs and for employers seeking to build a qualified workforce. Registered Apprenticeship is an employer-driven model, combining on-the-job learning with related classroom instruction and allows the Registered Apprentice to earn a paycheck from day one. Registered Apprenticeship Programs are a proven solution for recruiting, training and retaining world-class talent in Iowa. This program has the ability to attract a new and more diverse talent pool, close the gap in workers’ skills, and awards an industry credential issued by the Department of Labor upon completion of the program.

Additional information is available at https://www.earnandlearniowa.gov.

Additional Resources

Iowa Secretary of State

Corporations and Limited Liability Companies (LLC) are common business entities that must be registered with the Iowa Secretary of State (SOS) in order to conduct business within the state. Out of state businesses also have registration requirements in Iowa.

Additional information is available at https://sos.iowa.gov.

Iowa Department of Revenue

Employers are responsible for paying other Iowa taxes such as income, sales and use, and withholding to Iowa Department of Revenue.  

Information and electronic filing instructions for these taxes are available at https://tax.iowa.gov.

U.S. Wage and Hour Division (WHD)

WHD enforces many important programs for employers including but not limited to Federal minimum wage, overtime pay, child labor requirements, misclassification of workers, Fair Labor Standards Act (FSLA) and Family Medical Leave Act (FMLA).  

Additional information is available at  https://www.dol.gov/whd/foremployers.htm. 

Iowa Department of Labor

Iowa Department of Labor provides information on construction contractor registration, child labor permits, asbestos permits and licenses and Iowa OSHA regulations. 

Additional information is available at  www.iowadivisionoflabor.gov.

Iowa Unemployment Insurance Contact Information

Please refer to the Frequently Asked Questions at www.iowaworkforcedevelopment.gov/myiowaui-frequently-asked-questions before contacting the UI Tax Bureau.

Phone: 888-848-7442
Email: iwduitax@iwd.iowa.gov

UI Tax Customer Service Hours:

8:30 am to noon and 1 to 4 p.m. Monday - Friday (excluding state holidays)

Additional UI contact information is available at www.iowaworkforcedevelopment.gov/unemployment-insurance-contact-information.