(Washington, DC) The District of Columbia recently enacted legislation that requires all liable employers to pay an administrative assessment of two-tenths of one percent (0.2%) to support the administration of the District’s Unemployment Insurance (UI) Program.

This administrative assessment is payable by both rated (tax-paying) employers and self-insured (reimbursable) employers on the first $9,000 of wages paid to each employee during a calendar year. In terms of dollars, the assessment amounts to a maximum payment annually of $18 for each employee. The assessment goes into effect for wages reported for the quarter ending March 31, 2006.

For rated employers, this administrative assessment is in addition to their regular UI tax. It is due by the same date as their regular UI tax and may be combined as a single payment. Self-insured employers will receive a bill each quarter for the administrative assessment due. The bill will be mailed after their quarterly report is processed.

Rated employers should note the following important point: Only the amount paid in regular UI taxes can be reported to the Internal Revenue Service (IRS) on Form 940. The amount paid in administrative assessment is not reportable to the IRS.

The District has enacted this legislation because the annual allocations received from the US Department of Labor to fund the operation of the District’s UI program have not been adequate to maintain performance. The funds collected from this administrative assessment will be used to improve the eligibility determination process, to conduct periodic reviews to assure that claimants are actively looking for work and have no barriers to reemployment, and to prevent, detect and recover fraudulent overpayments. Each of these activities should help to reduce the amount of benefits that are paid out from the District’s UI Trust Fund and also reduce the amount of benefits charged against individual employer accounts.

For additional information regarding this administrative assessment, contact the Office of Unemployment Compensation at (202) 698-7550.