Employer Contribution Rates

New Rates Effective Jan. 1, 2021

Oklahoma’s unemployment insurance trust fund supported historic benefit payout levels to unemployed claimants in 2020. State law requires OESC monitor the solvency of the fund, which pays for the benefits to eligible claimants, and change the next year's employer contribution rates if solvency falls to a specific level. 2020's assessment found solvency decreased, putting the highest contribution rate level in effect starting Jan. 1, 2021. 

Our Annual Rate Notice sent in September detailed this major upcoming change. The notice, which went to every Oklahoma employer, contains a unique Benefit Wage Ratio based on reports submitted to OESC. We derive the rates employers' pay from that ratio, generated with the State's Current Experience Factor (50%) and its Conditional Factor (D).

Your "Notice of Employer Contribution Rate" contains your updated Benefit Wage Ratio and Contribution Rate for 2021. This graph shows how your rate and others correspond with the ratio. You can also find this information in the last two pages of the Oklahoma Employment Security Act. When viewing the information in the act, reference rows: State Experience Factor 50%, and Conditional Factor D. More on the calculation of these rates is in Article 3 of the OES Act.

New effective final rates for 2021 will range from .3% to no higher than 7.5%.

 

2021 rate changes are not impacted by employers' unemployment charges related to the pandemic.

Note for Employers: Before starting your First Quarter 2021 reporting to OESC, don't forget to change payroll processing software to the new contribution rate and the taxable wage limit found on your Notice of Employers Contribution Rate.


 

How do we calculate rates?

OESC calculates employer contribution rates using the numbers employers provide in their quarterly wage reports. The rate calculation involves dividing the benefit wage charges into the timely taxable wages. The BWC ratio is the percentage of the amount of benefit wages charges are to the total.

See this example: Benefit wage charge amount of $10,000 divided into an amount of timely taxable wages of $300,000 ends up with a benefit wage charge ratio of 3.3%. The $10,000 is 3.3% of the $300,000. The rate is calculated using the information from the table in the Oklahoma Employment Security Act for a contribution rate of 2.8%.

 


 

Protesting your Rate

If you wish to protest your rate change, you may do so by filling out our Employer Contribution Rate Protest Form and submitting to [email protected]. Your protest must be filed within 20 days of the mailing date on your rate change notice. If you email/fax your protest, your date of submission will be the time stamp of the email/fax, not the date noted on the actual protest form. If you mail the form in, the date of submission will be the postmarked date on the submission by the postal service.

Bear in mind - employers can only protest the rate calculation. Many employers attempt to re-open the claimant eligibility to challenge the benefit wage charge(s) on their accounts. This rate protest does not provide for that and only addresses the calculation. Errors found through the protest process are extraordinarily rare. The rate is final, and any amount owed must be paid  in April. 

The 2021 rate is effective Jan. 1, 2021, and the first quarter report and payment is due by April 30, 2021 - regardless if an employer has protested their rate or is in the appeal/hearing process.

This rate is different than the benefit wage charges, detailed here, which are the taxable base period wages reported by employers to OESC for the claimants and used to determine benefits eligibility as a result of either "total" or "partial unemployment."

 


 

Frequently Asked Questions

 

What is the Employer Contribution form and what do I do with it?

  • The form notifies the employer of their 2021 Contribution Rate effective beginning Jan. 1, 2021. It should be forwarded to whomever files your business' quarterly wage reports.

Why did my rate go up?

  • The number of claims filed/paid have depleted the unemployment trust fund to a level that state law requires OESC to change employer contribution rates and replenish the fund. This applies to nearly all Oklahoma employers, even those who didn't have any former employees claim unemployment.
  • A new benefit wage charge has caused the rate to elevate (benefit wage charges were waived during the COVID-19 pandemic).
  • Reduced payroll reported has caused the rate to increase.
  • An additional business has been merged with the account and that newly acquired business history has changed the calculation.
  • Wage history that was not reported or paid timely cannot be used, lowering the wage amount that could offset the benefit wage charges.

Why am I being charged for an employee that worked for my company over a year ago? They are working elsewhere now.

  • The 2021 rate calculation encompasses all benefit wages charges and timely taxable wages for the twelve quarters from July 1, 2017, through June 30, 2020. Each year, the oldest four quarters roll off, and the newest four quarters are added. After three years, the older charges go away.

Why am I being charged such a large amount for an employee that only worked for me a short time?

  • The benefit wage charge represents wages reported to OESC and used in a benefit calculation. When someone files for unemployment, the system looks at a four-quarter (one year) period of earnings to determine a claimant's eligible benefit amount. If the reported wages are incorrect, then you should file a wage report adjustment to correct the amount.

This business isn’t open anymore. What should I do?

What if I can’t afford a rate increase? Is it possible to reduce this rate?

  • State law does not allow for a reduction of employers' rates. A rate protest can only challenge benefit wage's calculation and timely taxable wage numbers.
  • Benefit wage charges (charges related to a business' former employee who has requested unemployment benefits) are added after a business' former employee/claimant receives their fifth week of benefits.
    • All employers who had reported wages for that four-quarter time period are sent a Notice of Benefit Wages to protest charges. The Notice of Contribution Rate protest does not allow for these claims to be re-opened or challenged.

How does OESC calculate this rate?

How do I pay my contribution?

  • Employers can pay their contribution rate along with other fees through the same portal they use for their state taxes -- EZ Tax Express.

Can I protest the rate given to my business?

  • State law does not allow for a reduction in employer rates. A rate protest can only challenge the calculation of the benefit wage and timely taxable wage numbers. A protest will likely involve a review of reported wages to OESC.