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Liability for Unemployment

Liability for Unemployment

Employing units do not automatically become liable for Missouri unemployment tax when they hire a worker. However, most employing units become liable in the regular course of their business by meeting one or more of the criteria for liability. The criteria are different for different types of liability. The conditions for liability are not identical to those of the Federal Unemployment Tax Act (FUTA), federal and state withholding, and Social Security tax. 

Becoming Liable

There are three categories of workers, each with its own criteria:

  1. Agricultural
  2. Domestic
  3. General Business (all other workers)

An employing unit may become liable to report workers who do one kind of work and still not have to report other categories of workers. The only exception is that an employing unit that becomes liable to report the wages of agricultural workers also must report general business workers.

An employing unit needs to notify the Division in writing when it becomes liable to pay taxes as an employer.  This notification needs to be submitted to the Division within 30 days from the date the employing unit becomes liable to pay taxes as an employer. An employer may do this online at the Online Business Registration portal or by submitting an Unemployment Tax Registration form to the Division.

An employer is liable for all employment it has during the entire year in which liability was incurred and continues to be liable for following years until its liability is terminated.

Types of Liability

When an employing unit is determined to be responsible for providing unemployment insurance coverage for its workers, the employing unit is required to pay a quarterly payroll tax. The employing unit then is called a contributing employer. An employing unit may become liable for providing coverage for its workers under any of the five following categories:

Criteria for Liability

Churches and Religious Orders are exempt from unemployment insurance coverage. Any workers they have are therefore not reportable for unemployment tax purposes. See Required Notice to Non-Covered Workers.

Governmental Entity (including federally recognized Indian Tribes)

A governmental entity becomes liable when it:

  • Employs a worker, regardless of the amount of wages paid or number of weeks the worker is employed
  • Is determined to be a successor to a liable Missouri employer by DES staff.

Nonprofit 501(c)(3) Organization

A nonprofit organization described in Section 501(c)(3) of the Internal Revenue Code becomes liable if it:

  • Employs four or more workers for some portion of a day in 20 different weeks
  • Is determined to be a successor to a liable Missouri employer by DES staff.

Employers of Domestic (household) Workers

An employer of a domestic or household worker in a private home, college sorority, or college fraternity becomes liable when it:

  • Pays $1,000 in cash wages in a calendar quarter
  • Becomes liable under the FUTA and employs a worker in Missouri
  • Is determined to be a successor to a liable Missouri employer by DES staff.

Employers of Agricultural Workers

An agricultural employer becomes liable when it:

  • Has 10 or more workers in 20 different weeks
  • Pays $20,000 in cash wages in a calendar quarter
  • Becomes liable under the FUTA as an agricultural employer and employs an agricultural worker in Missouri
  • Is determined to be a successor to a liable Missouri employer by DES staff.

General Business Employer (employer that does not fall into another category)

A general business employer becomes liable when it:

  • Pays $1,500 in wages (cash and in-kind) in a calendar quarter
  • Has a worker for some portion of a day in each of 20 different weeks
  • Becomes liable under the FUTA and employs a worker in Missouri
  • Is determined to be a successor to a liable Missouri employer by DES staff.

Voluntary Election of Coverage

Any employing unit that does not have sufficient employment or wages to become liable under the foregoing criteria may elect to become an employer subject to the Missouri Employment Security Law and to cover its workers for unemployment insurance. If approved by the DES, such an election would go into effect on the first day of the quarter in which the election is made and must continue in effect for at least two complete calendar years. Upon written approval, all services performed for this employing unit are considered employment, including workers who would otherwise be excluded. A sole proprietor self-employed individual cannot elect coverage on him/herself.

To voluntarily apply for coverage, an employer should send a request in writing to the DES at:

Missouri Division of Employment Security
Attn: Employer Liability Unit
P.O. Box 59
Jefferson City, MO 65104-0059

Account Number

Once liability is established, the DES maintains a separate experience rate account for each employer. The account number contains 14 digits as follows: 000000-0-000-0000. The first six digits identify the account. The seventh digit is changed when an ownership change occurs.

Administrative Determinations

A DES deputy issues an administrative determination, after investigation, on any matter pertaining to an employer's liability. The notice of such determination is mailed to the employer's last known address. The deputy may reconsider a determination, for good cause, within a year from the date of mailing such determination.

An employer may appeal any determination of liability. If the determination is not appealed, it becomes final 30 days from the date of mailing.

Other Types of Accounts

Reimbursable Employers

A governmental entity, federally recognized Indian tribes, or nonprofit organization with a federal exemption under Section 501(c)(3) of the Internal Revenue Code has the option to elect to reimburse the Missouri Unemployment Compensation Fund for the amount of UI benefits paid instead of paying a quarterly tax.

Such an election must be made in writing either:

  1. Within 30 days of the date the original notice of liability is mailed
  2. At least 30 days prior to January 1st of a calendar year for which such election shall be effective. A contributing employer who chooses to change to the reimbursable method must stay reimbursable for two calendar years.

Upon approval of an election to reimburse the fund, the employer will remain in that status until a request for termination of the election is filed at least 30 days prior to January 1st of the calendar year of termination.

Leased Employees

A lessor employing unit is an entity that leases employees to another business entity, referred to as a client lessee. The lessor employer is liable for taxes, or payments in lieu of taxes, on wages paid to the leased employees. The client lessee is jointly and severally liable for any unpaid taxes, or payments in lieu of taxes, interest and penalties to the Unemployment Compensation Trust Fund, unless the lessor employer financially guarantees payment. To financially guarantee payment, the lessor employer posts a surety bond, deposits securities, pledges a certificate of deposit, or provides an irrevocable letter of credit in the amount equivalent to the lessor's last yearly taxes to the Trust Fund or $100,000, whichever is greater. If payment is not financially guaranteed, the lessor employer must file separate quarterly contribution and wage reports for itself and each of its client lessees.

Related Links: Leasing Forms

Joint Accounts

Any employer may make application with the DES to participate in a joint common experience rating account with one or more other employers. The application includes the regulations for the formation and maintenance of joint accounts.

All joint accounts will be maintained only on a calendar year basis. Joint accounts must be maintained for a minimum period of two calendar years unless terminated sooner by action of the DES.

An employer that has been approved by the DES for withdrawal from the joint account shall be treated in all respects as a newly liable employer.

Common Paymaster

A common paymaster is two or more related corporations in which one of the corporations has been designated to disburse remuneration to concurrently employed individuals of any of the related companies. The DES must pre-approve all common paymaster arrangements. To receive DES approval, the related corporation designated to be the common paymaster must apply to the agency in writing at least 30 days prior to the beginning of the quarter in which the common paymaster is to be effective.

Common Paymaster Application

Multiple Reporting Units (MRU)

An employer with more than one business establishment may request additional reporting numbers for its establishments. Such employer would be furnished separate quarterly Contribution and Wage (CW) forms to report wages of workers at each establishment. Taxable wages reported and taxes paid by each establishment would be combined by the DES into one experience rating account.

Quarterly CW Reports and Reimbursable Billings for each additional reporting number would be mailed to each address furnished by the employer. A Notice of Claim for Unemployment Insurance Benefits also would be mailed to that address with respect to an individual whose wages were reported on the quarterly CW reports under an additional reporting number. All other correspondence would be mailed to the employer's headquarters or principal mailing address. Benefit charges applicable to wages reported under an additional reporting number are listed on separate charge sheets that are mailed with the Benefit Charge Statement to the principal address, but reimbursable charges may not be handled this way.


Division of Employment Security
P.O. Box 59
Jefferson City, MO 65104-0059
Phone: 573-751-3215
Fax: 573-751-9730

Claimant's E-mail: [email protected]
Employer's E-mail: [email protected]
Appeals E-mail: [email protected]

Confidential Information Request: 573-526-4464
[email protected]