State of Delaware
Department of Labor
State of Delaware
Department of Labor
Division of Unemployment Insurance
The "Unemployment Insurance Handbook for Employers" is designed to serve as your guide
to Delaware's unemployment insurance system.
Changes at both the state and federal level continue to occur in this important, but often
complex area of the law. As an integral link and partner in the unemployment insurance
system, it is important the employer community be aware of statutory, regulatory, and
Use of this handbook as a ready reference guide will give you a better understanding of the
Delaware Unemployment Compensation Law and make compliance easier.
SUMMARY OF SECTIONS
I. EMPLOYER PARTICIPATION IN THE CONTROL OF UNEMPLOYMENT
INSURANCE COSTS 4.
This section provides guidelines on how to approach
the claims and appeals processes. It also outlines
some precautionary measures which may help to avoid
improper charges to an employers' account.
II. INTRODUCTION TO UNEMPLOYMENT INSURANCE 7.
This section explains the purpose of the Unemployment
Insurance Program. It also lists the basic
eligibility requirements of workers and describes how
the unemployment insurance tax is collected.
III. EMPLOYMENT 8.
This section defines "employer" and "covered
employment" as specified in the Delaware Unemployment
IV. EMPLOYER LIABILITY 10.
This section specifies the criteria used to determine
an employer's liability under Delaware State Law.
V. OBLIGATIONS AND RESPONSIBILITIES OF LIABLE EMPLOYERS 11.
This section describes in detail the action required
of assessed and reimbursable employers by the
Unemployment Insurance Division to be in compliance
with the Law.
VI. TAX LIABILITY 14.
This section defines taxable wages and explains how
the assessment rates for newly liable employers are
VII. EXPERIENCE RATING 15.
This section defines terms used in the experience
rating process and explains how an individual
employer's assessment rate is determined. Also in
this section are instructions for transferring
experience rating and creating a joint account.
VIII. THE REIMBURSEMENT OPTION 19.
This section describes the benefit reimbursement
method available to most non-profit organizations
and government entities and how to elect this
option. It also describes how benefits are charged
to these employers.
IX. CLAIMS AND BENEFITS 22.
This section describes the benefit payment programs
available to workers and explains who is eligible
to receive them. It describes the claims process
and defines some terms used in benefit determination.
X. THE APPEALS PROCESS 25.
This section describes the "due process" remedies
available to employers and unemployed individuals
who disagree with administrative determinations.
APPENDIX I. EXPLANATION OF UNEMPLOYMENT INSURANCE FORMS 28.
This appendix provides employers with information
on the use and application of unemployment
insurance forms to facilitate compliance with
regulations of the Division of Unemployment
UC-1 Report to Determine Liability 28.
UC-8/UC-8A Employer's Quarterly Report 30.
UI-QPR-2 Quarterly Payroll Report for Reimbursable
Delaware Employment Training Fund 33.
UC-119 Request for Separation Information
(Base Period Employer) 34.
UC-119C Request for Separation Information
(Last Employer) 34.
UC-12 Notice of Benefit Wages Charged 36.
UC-400 Application for Rehire Credit 37.
UC-401 Statement of Benefit Wage Credits
for Rehire 38.
UC-409RC Statement of Benefit Wage Credits
for Rehire Denial 39.
UC-301 Notice of Hearing (Intrastate) 40.
APPENDIX II. EMPLOYER ASSESSMENT RATE TABLES 41.
The basic assessment rate for each employer for a
calendar year is determined prior to the due date
of the first basic assessment for that year in
accordance with these tables. Please refer to
Section VII of this handbook and Section 3350,
Title 19 of the Delaware Code.
APPENDIX III. DIRECTORY OF OFFICES 57.
APPENDIX IV. UNEMPLOYMENT INSURANCE INFORMATION HOTLINE 58.
STATEMENTS IN THIS BOOKLET DO NOT HAVE THE EFFECT OF
LAW OR REGULATION, ALTHOUGH REFERENCE TO THE DELAWARE
CODE IS PROVIDED WHENEVER POSSIBLE.
I. EMPLOYER PARTICIPATION IN THE CONTROL OF UNEMPLOYMENT INSURANCE
A. General Precautions
We depend on you, the employer, to supply us with information
necessary to process claims promptly and efficiently. You can aid
us greatly by maintaining the required employee records in the form
in which they will be used by the Department. Guidelines on the
proper method of record keeping are provided in this handbook.
It is your responsibility to provide prompt and accurate
information to insure that only those claimants meeting the
necessary eligibility requirements will receive benefits. This
action will avoid unnecessary charges to your account. In
addition, without your testimony at an appeals hearing, there is
only the employee's account of the separation to guide the Appeals
Referee or the Unemployment Insurance Appeal Board in making a
You can make this process more efficient by documenting employee
actions which lead to termination for cause and by having the
employee sign it. In the case of a firing, the burden of proof is
on the employer to show that it was for just cause.
You should also clearly state the policies of your business
regarding acceptable employee behavior in writing and give each
employee a copy to avoid misunderstanding.
You can help control costs by notifying the appropriate local
unemployment insurance office immediately when you think an
individual doesn't qualify for benefits, i.e. you have offered
suitable reemployment which is refused.
Remember that unemployment insurance benefits are provided to
employees from your tax dollars.
B. What the Employer Can Do to Avoid Costly Mistakes
One way to protect your rights is to maintain proper records on all
employees and to document any violation of rules and regulations.
1. All employees should be made aware of company rules and
regulations. It is best to give them a written copy of
these rules and ask them to sign a copy to be placed in
their personnel file. It should be stated to the employee
that disregard of company rules could result in disciplinary
action or discharge.
2. Unless an offense is so great that the employee is to be
immediately dismissed and unless the employee is aware that
committing such an offense is cause for immediate dismissal,
a warning should be given and the employee allowed another
a. Verbal and Written Warnings.
(1) When a supervisor speaks with an employee about
any phase of his work which is unsatisfactory, a
documentation of the verbal warning should be
made for the personnel file.
(2) If the employee has disobeyed one of the
specified company rules, a written warning
should be issued:
(a) The offense should be listed along with
the observer's remarks about the incident.
(b) The employee should be given space to
state his version of the incident.
(c) The employee should be asked to sign the
form, if only to acknowledge that he has
been warned, whether or not he agrees with
b. If a written warning notice is required by a union
contract, a copy should be sent to the union, via
certified mail, with a return receipt requested. The
employee should be provided a copy as required.
C. Discharge for "Just Cause" Connected with the Work
1. Be certain employees to be discharged are aware of the
company rule which was broken.
2. Be certain that the employee was warned that his actions
might result in discharge.
3. After several warnings or suspension, document the reason
for the discharge. If possible, the employee should sign a
form acknowledging the reasons for discharge.
4. Indicate on the "Separation Notice" (Forms UC-119/UC-119C)
as specifically as possible, the reason for discharge.
5. If an employee is guilty of a willful or wanton disregard of
the last employer's interest, deliberate violation of the
employer's rules, disregard of the standards of behavior
which an employer has the right to expect, or gross
negligence in the performance of duties, and is discharged,
this termination of employment may be considered for "just
cause connected with the work" and result in a
disqualification for benefits (Abex v. Todd, Delaware
Superior Court, 1967).
The key words here are "willful" and/or "wanton". Legal
precedent states that, "Misconduct”, as used in unemployment
compensation statutes does not mean mere inefficiency,
unsatisfactory conduct or failure of performance as a result
of inability or incapacity, inadvertence in isolated
instances or good faith errors of judgement" (Starkey v.
Unemployment Insurance Appeal Board, Delaware Superior
D. Voluntary Quit
An individual will be disqualified for benefits after leaving work
voluntarily without good cause attributable to such work. The
burden of proof for a voluntary quit is on the employee to show
"good cause" attributable to such work for voluntarily terminating
II. INTRODUCTION TO UNEMPLOYMENT INSURANCE
The Unemployment Insurance Program established by the Social
Security Act of 1935, arose from the need to provide workers with
funds for non-deferrable expenses while between jobs. Unemployment
Insurance is not welfare. Benefits are paid as a matter of right,
without regard to need, to eligible claimants who meet conditions
fixed by law. To qualify, workers must have earned sufficient
base period wages from covered employers, have become unemployed
through no fault of their own, and be able to work, available for
work and actively seeking work (Section 3315, Title 19, Delaware
The unemployment insurance benefits paid to eligible, out of work,
individuals comes from a trust fund contributed to by employers
who are subject to a quarterly payroll tax on the taxable wages
paid to each employee during the year. Workers do not pay any
part of the Delaware tax, and employers can make no payroll
deductions for this purpose. Assessed employers can receive a
credit up to 5.4% toward the 6.2% Federal Unemployment Tax (FUTA).
The amount of credit an employer receives is determined by State
contributions which they have paid under an approved State
unemployment insurance law. The Federal government then returns
part of these monies collected from the Federal unemployment tax
to the States to pay the cost of unemployment insurance program
administration. The rest of the money goes to pay the cost of
administration of the unemployment insurance program at the
The Unemployment Insurance program assists in stabilizing the
economy because it allows wage earners to maintain consumption
expenditures when they lose their jobs, maintains an available,
skilled labor force, and encourages employers to provide more
A. Employing Unit
1. "Employing unit", for unemployment insurance purposes, means
any individual, partnership, corporation, or any other type of
organization, that has in its employ one or more individuals
performing services within this State. "Employing unit" also
means any governmental entity which has in its employ
individuals performing services in this State.
A “common paymaster” is not recognized as an employer and may
not pay assessments with respect to wages for another employing
An “employee leasing company”, a “professional employment
organization (PEO)” or any other similar entity shall not be
considered to be the employer of any leased employees. The
services performed by leased employees shall be considered to
be services performed for the “employer client company” of the
“employee leasing company”, “professional employment
organization (PEO)” or any similar entity and the “employer
client company” shall be considered to be the employer of its
leased employees. An “employer client company” shall be
responsible for reporting the gross wages of its leased
employees to the Division of Unemployment Insurance on Form UC-
8A (Quarterly Payroll Report) and for paying any assessments
due on the taxable wages of its leased employees to the
Division of Unemployment Insurance as reported on Form UC-8
(Quarterly Tax Report).
2. "Employment", for the purpose of U.I. coverage, is defined as
any service, unless specifically excluded, performed by an
individual for remuneration under a contract of hire, whether
the contract is written or oral, express or implied (Section
3302)(10) and (21).
3. "Employment" also includes:
a. Service performed by an individual in the employ of this
State or its local governments.
b. Service performed by an individual employed by a
religious, charitable, educational or other organization,
if the organization had four or more individuals in
employment for some portion of a day in each of 20
different weeks, whether or not the weeks were
consecutive. An exception to this provision would be
church related schools.
B. Exclusions from the Definition of Employment
Employment for the purpose of U.I. coverage does not apply to
1. In the employ of a church (except as specified above).
2. By a minister of a church in the exercise of his ministry.
3. By an elected official in the exercise of his duties.
4. By a member of a legislative body or member of the judiciary.
5. By a member of the State Army National Guard or State Air
6. By an employee serving on a temporary basis in case of an
7. By an insurance agent or real estate agent if such service is
performed for remuneration solely by way of commission.
However, employer paid fringe benefits such as health, life, or
disability insurance are non-commission forms of remuneration
that bring the service of a commission based insurance agent or
real estate agent under the definition of covered employment.
8. By an individual in the employ of his son or daughter or
spouse, and service performed by a child under the age of 18 in
the employ of his father or mother. (Does not apply to a
9. In the employ of a nonprofit organization operated exclusively
for religious, charitable, scientific, testing for public
safety, literary or educational purposes, or for the prevention
of cruelty to animals or children, or for any political
campaign on behalf of a candidate for public office (except as
specified in the section on EMPLOYMENT above).
10.In the employ of a school, college or university, if such
service is performed by a student who is enrolled and is
regularly attending classes at such institutions.
11.By the principal of a proprietorship or the members of a
12.As a direct seller as defined in Section 3508 of the Internal
Pursuant to an amendment to Section 3302, Title 19, Delaware
Code, services performed by officers of closely-held corporations
on or after January 1, 1996 are considered covered employment and
the wages earned by these corporate officers are subject to
unemployment insurance tax. Use of Form UIS-39 (Request for
Coverage of Corporate Officers)was discontinued at that time.
IV. EMPLOYER LIABILITY
A. Liable Employers Under the Federal Unemployment Tax Act (FUTA)
1. Agriculture Employers are liable with respect to any calendar
a. they pay cash remuneration of $20,000 or more in any
calendar quarter in either the current or the preceding
calendar year, or
b. employ 10 or more individuals engaged in agricultural
labor for some portion of a day in each of 20 different
calendar weeks whether or not such days were consecutive
in either the current or the preceding calendar year.
2. Employers of Domestic or Household Workers, including domestic
service in a private local college club, or local chapter of a
college fraternity or sorority, are liable with respect to any
calendar year if the employer pays cash remuneration of $1,000
or more in any calendar quarter of that year.
3. Governmental Entities and Nonprofit Organizations are not
liable under FUTA, but are covered by State law.
4. All Other Employers are liable with respect to any calendar
year if they:
a. pay wages of $1,500 or more during any calendar quarter
in the current or preceding calendar year, or
b. employ at least one person for some portion of a day in
each of 20 different calendar weeks, whether or not such
weeks were consecutive in either the current or preceding
B. Methods of Payment
Liable employers under the State U.I. law fall into two main
categories, contributing or reimbursing, depending on the
method of payment used to satisfy unemployment tax
Generally, most employers are required to pay unemployment
insurance assessments; however, nonprofit organizations and
government entities may elect to reimburse the Unemployment
Insurance Trust Fund for all benefits paid to their former
employees on a dollar for dollar basis. This option is
described in Section VIII, THE REIMBURSEMENT OPTION.
V. OBLIGATIONS AND RESPONSIBILITIES OF LIABLE EMPLOYERS
A. Employer Account Number
Each employer is assigned an employer account number by the
Department of Labor upon receipt of a Form UC-1 (Report to
Determine Liability) that establishes liability under the
Unemployment Compensation Law. This six digit account
number (XXXXX-X) must appear on all correspondence and forms
submitted by the employer to the U.I. Division.
B. Maintenance of Records and Filing of Reports
The law requires that every employer maintain certain
records for anyone employed in Delaware. These records are
to be maintained for the period of the previous four
consecutive calendar years and are subject to inspection by
the Department of Labor. For questions about specific
records, contact the Division of Unemployment Insurance.
Any employer legally required to file specified reports with
the Department who neglects or refuses to do so within five
days after the time when such reports are due, is subject to
a fine of $17.25.
The records must show at a minimum for each employee:
1. Name and social security number.
2. Gross and taxable wages for each payroll period.
3. All other payments made to the employee including
holiday pay, bonuses, board and lodging, tips, and
C. Display of Poster
Each liable employer (except household employers) must
display the poster, Notice of Coverage (Form UC-6), with the
employer’s name printed on it in a place customarily
frequented by employees. This poster is furnished by the
Division of Unemployment Insurance after liability is
established; it informs employees that employment is covered
under the Unemployment Insurance laws.
Household employers must provide each employee with a
facsimile of the poster with the employer’s name printed on
it. The Division of Unemployment Insurance furnishes a
facsimile of the full-size poster after liability is
established; it informs employees that employment is covered
under the Unemployment Insurance laws.
D. Quarterly Assessment Reports and Payments
All liable employers are required to submit for each
calendar quarter, a summary assessment and payroll report
with the amount of tax due. A quarterly report must be
submitted even if the employer has had no payroll in the
quarter and whether or not any assessment is payable. The
form for reporting (Form UC-8, Employer's Summary Assessment
Report) is mailed to registered employers well in advance of
the due date. It is the employer’s responsibility to notify
the Department if the form is not received. Failure to
receive the form does not excuse the requirement to file by
the due date. If the employer fails to file a quarterly
report or if the report is incorrect or insufficient and is
not filed within 30 days after the date on which the
assessment report was due, the Department may make an
estimate of the liability of that employer based on any
information which the Department may have or obtain and may
make demand upon the employing unit for payment. Written
notice will be given the employer of the determination which
may be appealed within 15 days after the mailing of the
notice. However, this does not relieve the employer from
his obligation to file a report for the quarter(s) in
question. In addition, assessments which remain unpaid on
the date they are due and payable shall bear interest at the
rate of 1.5% per month until past due assessments,
penalties, and accrued interest are received by this
Any employer who has any outstanding tax reports,
assessments, penalties, or interest as of September 30 of
any calendar year will be subject to a delinquent assessment
rate effective January 1 of the subsequent calendar year.
The delinquent assessment rate will be either 6.5%, 6.6%,
6.8%, 7.0%, 7.5%, 7.6% or 8.4% depending on the balance in
Delaware's Unemployment Insurance Trust Fund. Currently,
the delinquent assessment rate is 6.5%.
The responsibility to register and comply with the reporting
requirements of the Delaware Code rests with the employer.
E. Reimbursable Employers
Following the end of each month, nonprofit organizations and
governmental entities electing benefit reimbursement will be
billed for the amount due. The monthly statement of the
amount due will represent the total amount of benefit
payments charged to the employer's account in that month.
Payment is due within 30 days of the mailing date, after
which time an interest charge of 1.5% per month will be
assessed from the due date to the date of payment.
F. Failure to Pay Assessments
Failure to pay assessments when due or to reimburse for
benefits paid, subjects the employer to possible civil or
G. Furnishing Information for Determination of Benefit Claims
When a person applies for unemployment insurance, each
employer for whom the claimant has worked in the first four
of the last five completed calendar quarters, as well as the
last employer, is required to furnish information on the
reason for separation. To permit prompt determination of
the claim, the information must be supplied within 7 days of
the date contained on the "Separation Notice" (Forms UC-
With the separation information supplied by the last
employer, the Division determines whether or not the
claimant is eligible for benefits. With separation
information supplied by the base period employer, the
Division determines whether benefit wage charges should be
made to the merit rating account of the employer. Employers
should exercise care to complete the form correctly so that
their accounts are properly charged. If the form is not
returned within the time specified by law, the employer
shall be barred from claiming subsequently that a benefit
wage charge should not be made with regard to the separation
or that the worker to whom such notice applied should be
VI. TAX LIABILITY
The unemployment insurance tax you pay depends on the size of your
taxable payroll and the rate of your tax. The taxable wage base,
or the amount of "wages" for each covered employee on which
unemployment insurance assessments must be paid, is determined by
the Delaware legislature in accordance with a federally determined
minimum. The taxable wage base is currently $10,500.00.
"Wages" is defined as all remuneration for personal services
including commissions, bonuses (excluding any attendance bonus paid
during or incident to any period of unemployment), dismissal
payments, holiday pay, and the cash value of all remuneration in
any medium other than cash. “Wages” also include the employee’s
contribution to a retirement or cafeteria plan. (This includes,
but is not limited to, Section 401(K)and Section 125 plans.)
New employers, except those in North American Industry
Classification System (NAICS) categories 236, 237 and 238 are taxed
at the average employer assessment rate of all Delaware employers.
The average employer assessment rate is determined by multiplying
the total taxable wages paid by each employer, regardless of
industrial classification category, during the 12 consecutive
months ending on June 30 by the employers' assessment rate
established for the next calendar year and dividing the aggregate
product for all employers by the total of taxable wages paid by all
employers during the 12 consecutive months ending June 30.
New employers in NAICS categories 236, 237 and 238 (construction
industry) are taxed at the average industry assessment rate in that
employer's particular NAICS category or the average construction
assessment rate of NAICS categories 236, 237 and 238 whichever is
No employer's rate can be less than the assigned new employer rate
for any calendar year until there has been employment in each of
the two consecutive experience years (an experience year is the
four consecutive calendar quarters beginning on July 1 of any year
and ending on June 30 of the following year) immediately preceding
the computation date of the employer's assessment rate for that
VII. EXPERIENCE RATING
A. Before explaining how to determine the tax rates of
employers who qualify for an earned assessment rate, it will
be necessary to become familiar with several terms:
1. Experience Year - the four consecutive calendar
quarters from July 1 of any year to June 30 of the
2. Calendar Quarter - one of the four periods in a year
ending March 31, June 30, September 30, and December
3. Taxable Wage Base - the wages, subject to
unemployment insurance tax, paid to covered employees
in any calendar year.
4. Employee's Benefit Wages - wages earned by an employee
during the base period.
5. Employer's Benefit Wages - the total of all employee
benefit wages paid by an employer during any
6. Rehire Credit - a reduction in an employer's benefit
wage charges resulting from the rehire of an employee
during a claim benefit year before more than 75% of
the total benefits to which such employee was entitled
to receive have been paid.
7. Benefit Wage Ratio - the percentage obtained by
dividing the total benefit wages, minus rehire
credits, for the three most recently completed
experience years by an employer's total payroll
subject to assessments for the same three experience
years, as shown on his quarterly assessment reports.
8. State Experience Factor - total benefits paid from the
Delaware U.I. trust fund during the last three
experience years, divided by the total benefit wages
of all employers for the same three years.
9. Basic Assessment Rate - an employer's rate for any
calendar year is determined on the basis of his
benefit wage ratio as of June 30 of the preceding
Determination of Benefit Wage Charges, Rehire Credits
and Tax Rates
If there is more than one liable assessed employer in a claimant's base
period, each base period employer will be charged the amount of benefit
wages paid to the claimant by that employer during the claim base period.
Each base period employer will be liable to receive a maximum benefit
wage charge up to the taxable wage base. If a base period employer, who
is not the last employer, has paid for part-time employment during the
base period and continues to give the employee employment to the same
extent while the individual is receiving benefits as was given during the
base period, no benefit wages will be charged to the part-time employer.
Employers will also not be charged if they can prove to the satisfaction
of the Division that the employee was terminated for "just cause" or left
voluntarily without good cause attributed to such work.
Employers will be notified quarterly on Form UC-12 (Notice of Benefit
Wages Charged to Employer's Merit Rating Account) of any benefit wages
charged to their accounts or relief of any benefit wages previously
Assessments payable by employers cannot be deducted from the
wages of employees.
Here is a calculation of an employer's benefit wage ratio.
If the wage records looked like this:
Experience Taxable Wages Benefit Wages Rehire Adj. Benefit
Year Reported Charged Credit Wages Charged
2007 $ 65,601.00 $ 2,516.00 $ 0 $ 2,516.00
2008 67,842.00 4,210.00 0 4,210.00
2009 70,422.00 7,459.00 2,000 5,459.00
Totals $203,865.00 $14,185.00 $ 2,000 $12,185.00
The benefit wage ratio would be 0.05976 or 6.0%
i.e., $ 12,185.00
Using the tax table for calendar year 2010 with a State experience
factor of 52, this employer's effective assessment rate for
calendar year 2010 would be 3.3% (a basic rate of 3.1% plus a 0.2%
supplemental assessment rate).
As may be seen by examining the ratio, the larger the payroll,
i.e., the bigger the business, the smaller the effect of one more
employee collecting U.I. benefits as opposed to a smaller business
where the ratio will be increased by a greater amount.
An employer's basic assessment rate is determined by locating the
employer's benefit wage ratio and the State experience factor in
the following tables, Exhibits 1-8. (See Appendix II). For tax
years prior to calendar year 1988, a supplemental assessment rate
of 1.5% was added to the basic assessment rate to obtain the
effective assessment rate.
Section 3350(9), Title 19, Delaware Code as amended in July 2003
provides that an employer’s basic rate shall be increased by a
“supplemental assessment” of .2%.
B. Rehire Credit
Section 3350, Title 19, Delaware Code, as amended July 1, 1994
provides that an employer may apply for rehire credit against
benefit wages charged to his experience rated account if:
• the employer reemployed a claimant during the claimant's
benefit year and because of such reemployment, prevented the
payment of more than 75% of the maximum benefits to which
said claimant was entitled to receive during the benefit
• base period wages (stated as benefit wages on the quarterly
benefit wage charge notice, Form UC-12) upon which the claim
was based were charged to the employer's experience rated
account during the benefit year just ended,
• the employer applied for rehire credit within ninety (90)
days following the end of a claimant's benefit year ending
A signed application for rehire credit must be made on Form UC-400
(Application for Rehire Credit). No rehire credit can be applied
for prior to the end of the claimant's benefit year. Applications
for rehire credit not filed within 90 days will be denied.
Application forms (UC-400) may be obtained from the Department of
Labor by writing to the Division of Unemployment Insurance, P. O.
Box 9953, Wilmington, Delaware 19809-0953. Form UC-400 should be
completed from your records.
Rehire credit may be granted for an amount of 25%, 50%, or 75% of
the original charge depending on the balance remaining in the
claimant's benefit account when his benefit year ends. The credit
will be applied in the calendar year and quarter in which the
claimant's benefit year exhausted. Credit is NOT retroactive to
the period in which the benefit wages were charged or rehire
occurred. If an application for rehire credit is denied, the
employer will be notified of the reason on Form UC-409RC (Notice of
Denial of Application for Rehire Credit). If the credit is
allowed, the employer will be issued a Statement of Benefit Wage
Credits (Form UC-401).
C. Transfer of Experience Rating
If an employer transfers its trade or business, or a portion
thereof, to another employer and, at the time of the
transfer, there is any common ownership, management or
control of the two employers, then the unemployment
experience attributable to the transferred trade or business
shall be transferred to the employer to whom such business
is so transferred. The rates of both employers shall be
recalculated and made effective immediately upon the date of
the transfer of trade or business.
Whenever a person who is not an employer under Delaware’s
Unemployment Insurance Law at the time the trade or business
of an employer is acquired, the unemployment experience of
the acquired business shall not be transferred to such
person if the division finds that such person acquired the
business solely or primarily for the purpose of obtaining a
lower rate of contributions. Instead, such person shall be
assigned the applicable new employer rate under §3348 of
Delaware’s Unemployment Law. In determining whether the
business was acquired solely or primarily for the purpose of
obtaining a lower rate of contributions, the division shall
use objective factors which may include the cost of
acquiring the business, whether the person continued the
business enterprise of the acquired business, how long such
business enterprise was continued, or whether new employees
were hired for performance of duties unrelated to the
business activity conducted prior to acquisition.
Any person who knowingly violated or attempts to violate or
any person who knowingly advises another person in a way
that results in a violation of any provision related to
determining the assignment of a contribution rate shall be
subject to unemployment insurance rate increases, civil
penalties and criminal prosecution.
D. Joint Accounts of Employers
As provided by Section 3352, Title 19, Delaware Code and
Regulation 38, two or more liable employers may elect, by
submitting a written request to the Unemployment Insurance
Division, to group their experience rating accounts by
forming a "joint account". Upon its approval of the
application, the Department will establish a joint account
for such employers effective as of the beginning of the
calendar quarter in which the Department receives the
application. Also, a joint account will be established when
the Department determines that a reorganization may
adversely affect the solvency of the Unemployment
Compensation Fund. Such a joint account will be effective
within the calendar quarter that reorganization occurs.
Under this arrangement, the employer accounts are treated as
a single account in the determination of a common tax rate.
However, each account must continue to file a separate
quarterly report (Employer's Summary Assessment Report, see
Section V) to which the common rate is applied.
E. Notification of Assessment Rate
All employers are notified of their rate of assessment for
each calendar year by the Unemployment Insurance Division.
This determination becomes conclusive and binding within
fifteen days after the mailing of the notice unless the
employer files an application for review and redetermination
by writing to the Division.
F. FUTA Tax
Under the provisions of Chapter 23 of the Internal Revenue
Code, a tax is levied on employers covered by FUTA, as noted
in Section IV of this handbook, by the Federal government at
a rate of 6.2% on the taxable wages paid to an employee in
any calendar year. The law, however, provides a credit of
up to 5.4% toward the Federal tax liability to employers who
pay State U.I. taxes timely under an approved State
unemployment insurance program. This Federal tax is used to
pay administrative costs, both State and Federal, associated
with unemployment compensation programs.
G. Training Tax
Section 3401(a), Title 19, Delaware Code, provides for a
fifteen one-hundredths of one percent (0.15%) per year tax
on liable employers on wages subject to Unemployment
Insurance taxes. The funds are used to provide industrial
training or retraining for dislocated workers, school-to-
work transition services, and career ladder training for
State employees. Training tax bills are mailed to employers
on a semi-annual basis. Interest may accrue and be
collectible on all unpaid training tax assessments at the
same rate applied to delinquent unemployment insurance
VIII. THE REIMBURSEMENT OPTION FOR SPECIAL ENTITIES
Nonprofit organizations operated exclusively for religious,
charitable, scientific, literary or educational purposes (those
exempt under Section 501(c)(3) of the Internal Revenue Code) and
governmental entities may discharge their obligation under the
Unemployment Insurance Law by reimbursing benefits paid to their
former employees on a dollar for dollar basis in lieu of tax
contributions. The State of Delaware is a reimbursable employer
for its Merit System employees.
A. Charging of Benefits Under the Reimbursement Option
Employers electing the benefit reimbursement option are
advised of all charges made against their accounts, thereby
giving them the opportunity to review these charges and
object if they believe that benefits have been improperly
paid or charged to their accounts.
At present, the accounts of nonprofit organizations electing
the reimbursement option are charged for the total amount of
regular benefits paid and the total of the first compensated
week and one-half of the extended benefits paid to their
former employees in subsequent weeks (see Section IX. Claims
and Benefits for a definition of extended benefits). As of
January 1, 1979, governmental entities were charged for the
full amount of any extended benefit payments.
Following the end of each month, each nonprofit organization
or governmental entity that has elected the benefit
reimbursement option is billed for the amount of benefit
payments charged to the employer's account during that
Payment is due within 30 days after the mailing date of the
monthly bill. If the amount due is not paid by the due
date, interest will be assessed on the unpaid balance at a
rate of 1.5% per month or any fraction thereof.
B. Benefit Charge Determination
If there is more than one liable reimbursable employer in
the base period, the percent of benefits paid charged to
each reimbursable employer will be the same as the percent
of total base period wages each reimbursable employer paid
to the claimant. The base period is the first four of the
last five completed calendar quarters preceding the date
when the claim is filed.
The following is an example of a benefit charge
determination when there is more than one liable reimbursing
employer in the base period:
A claimant has total base period wages of $10,000. During
the first half of the base period he worked for the State
earning $5,000. For the next quarter he worked for a
nonprofit employer who chose the reimbursement method,
earning $2,500. For the final quarter he worked for an
employer in the private sector who paid the assessment tax,
The State's share is 50% of the Maximum Benefit Amount.
The nonprofit employer's share is 25% of the Maximum Benefit
The private employer's share is paid from the U.I. trust
fund to which the employer has been making quarterly tax
C. Group Accounts
Two or more employers that have become liable for payments
in lieu of assessments may file a joint application to
establish a group account for the purpose of sharing the
costs of benefits paid to former employees. Each member of
the group is liable for reimbursement payments in the same
proportion as the benefit payments made to his former
employees are to the total amount of benefits paid by all
employers in the group. Such account must remain in effect
for at least two years.
D. Termination of the Reimbursement Option
The election by a nonprofit organization to become liable
for reimbursement in lieu of tax assessments can be
terminated by filing a written notice with the Department
not later than 30 days prior to the beginning of the taxable
year for which such termination shall be effective.
However, the entity continues to be liable for the
reimbursement of benefits that are based on weeks of
employment occurring prior to the termination date.
E. Contribution Method for Government Entities or
Any governmental entity or instrumentality may, as an
alternative to direct reimbursement, elect to pay
assessments by filing written notice of its election with
the Department, provided that such election remains
effective for at least two calendar years, after which time
it may be terminated by filing written notice with the
Department not later than February 1 of any year with
respect to which termination is to become effective. The
assessment rate shall be determined on or before September 1
of each year by reviewing the benefit cost experience of all
governmental entities which have made such election and on
the basis of that experience establishing the rate for the
next following calendar year.
IX. CLAIMS AND BENEFITS
A. The Basic Programs
1. Regular State Unemployment Insurance (U.I.
This program provides benefit payments to eligible Delaware
workers who are unemployed through no fault of their own and
file a claim in this State.
2. Unemployment Insurance for Non-Resident Workers
This program makes it possible for a worker who lives in one
state but works in another to collect unemployment insurance
benefits, should he/she become unemployed.
3. Unemployment Insurance for Federal Workers (UCFE)
Federal workers are covered by a special program which
provides benefits based on wages paid as a civilian employee
of the Federal Government. To be eligible, UCFE claimants
must meet the same requirements as regular U.I. claimants.
4. Unemployment Insurance for Ex-Servicepersons (UCX)
UCX is paid on the basis of remuneration for military
service. The State operates this program under an agreement
with the Federal government.
5. Extended Unemployment Insurance Benefits (EB)
The payment of benefits may be extended past the maximum of
26 weeks if the State rate of insured unemployment exceeds
B. Filing for Benefits
1. How does an Individual File for Unemployment
As soon as an individual becomes unemployed, he/she should
report to the nearest Unemployment Insurance Local Office in
the state in which he/she resides. The locations of
Delaware's local offices are listed in the back of this
2. Who is Entitled to Receive Unemployment Insurance?
The receipt of U.I. benefits is an earned right, and each
claim for benefits is contingent upon the individual meeting
the requirements of the Unemployment Compensation Law (Title
19, Delaware Code).
3. What are the Eligibility Requirements?
To be eligible for U.I. benefits, four basic eligibility
requirements must be met:
a. A person must be unemployed through no fault of his own.
b. An individual must be able to work, available for work,
and actively seeking work.
c. An individual may be required to register for work with
the Division of Employment and Training.
d. A person must have been paid at least 36 times his weekly
benefit amount by a liable employer in the base period.
4. For What Reasons May a Person be Disqualified from
a. Quitting a job voluntarily without good cause connected
with the work.
b. Being discharged from work for just cause.
c. Refusing an offer of suitable work for which the claimant
is reasonably fitted.
d. Refusing a referral to a suitable job opportunity offered
by the Employment Service, except in cases where:
(1) The referral would prevent the claimant from
completing a vocational training course approved
by the Department of Labor.
(2) The claimant would be required to join a company
union or refrain from joining a bona fide labor
organization or withdraw from a union.
(3) The position is vacant because of a strike or
other labor dispute.
(4) The work is at an unreasonable distance from
the claimant's residence.
(5) The pay, hours, or other conditions of work are
substantially less favorable than those
prevailing for similar work in the locality.
e. If unemployment is due to a stoppage of work because of a
labor dispute, except for a "lockout".
f. If the claimant is receiving or seeking unemployment
benefits from another state or from the federal
g. If a false statement has been deliberately made to obtain
unlawful benefits, an individual may be denied benefits
for one year from the date on which the statement was
h. If unemployment is due to commitment upon conviction and
sentencing to any penal institution.
i. Benefits are not paid to aliens, unless they were
lawfully admitted for permanent residence at the time the
services were performed.
5. Special Exclusions
The following are not entitled to benefits:
a. Persons engaged in an instructional, research or
principal administrative capacity in an educational
institution for the period between two successive
academic years or during a similar period between two
regular terms whether or not successive or during a
period of sabbatical leave, if the individual has a
contract or a reasonable assurance to perform services
for both academic years or both terms.
b. Non-professional employees of educational institutions
between academic terms. If not rehired after such
period, and if otherwise eligible, these individuals
would be entitled to retroactive unemployment insurance
benefits if they met all other reporting requirements.
c. Persons engaged in seasonal employment in the first
processing of agricultural and/or seafood products unless
the period of unemployment occurs during a month during
which the person normally is engaged in "seasonal
C. Some Definitions of Frequently Used Terms
Base Period - The first four of the last five completed calendar
quarters prior to the claim.
Benefit Year - The 52 week period beginning with the week in which
the claimant files a valid claim.
Partial Benefits - A claimant whose hours of work are reduced may
be eligible to receive partial benefits.
Weekly Benefit Amount (WBA) - When the balance in the Unemployment
Insurance Trust Fund is equal to or greater than $90.0 million, an
individual's weekly benefit amount will be determined by taking
1/46 of his/her total covered wages paid during the two quarters of
the individual's base period in which such wages were highest.
When the Trust Fund balance is less than $90.0 million, an
individual's weekly benefit amount will be 1/52 of his/her total
wages paid during the two quarters of the individual's base period
in which such wages were highest.
The minimum weekly benefit amount is $20.00 and the maximum weekly
benefit amount is $330.00.
Maximum Benefit Amount (MBA) - Eligible individuals during any
benefit year are entitled to regular benefits equal to 26 times the
computed WBA or 50% of base period wages, whichever is less.
Reduction of Benefits by Private Pension Plan - An otherwise
eligible individual receiving a retirement pension or annuity from
a base period employer will be paid a WBA less a dollar for dollar
deduction for that employer-financed portion of such pension,
annuity or periodic payment which is based on that individual's
Back Pay Awards - A claimant is not entitled both to pay for a
given period of employment and to unemployment insurance benefits
for the same period of time. Cases arise where disagreement exists
between the employer and the claimant as to entitlement to pay for
certain periods of time. While such a dispute is pending, the
claimant may obtain unemployment benefits. If retroactive wage
payments are subsequently received covering the period for which
the claim for benefits was allowed, then to the extent that
payments were received, the claimant is retroactively determined
not to have been entitled to these benefits and such benefits are
subject to recovery. An employer affected by this provision should
promptly notify the U.I. Division so that a redetermination can be
made and if appropriate the charges previously issued against the
employer may be cancelled.
Any employer who makes a deduction from a back wage award to a
claimant because of that claimant's receipt of unemployment
benefits, for which said claimant has become ineligible by reason
of the receipt of such award, shall be liable to reimburse the
Unemployment Insurance Trust Fund an amount equal to the amount of
X. THE APPEALS PROCESS
If an employer or claimant does not agree with a Claims Deputy's
determination, a hearing before an Appeal Referee may be requested. The
appeal must be filed within 7 calendar days after delivery of the
determination or, if the determination was mailed, within 10 calendar
days after the mailing date of the determination, after which time the
Claim Deputy's decision is final.
An Appeals Referee then conducts a hearing under oath, reviews the case
and makes a decision in accordance with the provisions of the Delaware
Unemployment Compensation law. Benefits may be paid in accordance with
the Deputy's ruling, even during the appeal process, until such time as
the decision is overturned or confirmed.
The decision of the Appeals Referee may be appealed to the U.I. Appeal
Board, an independent, quasi-judicial five member board appointed by the
Governor, if either the employer or claimant contests the former
decision. Appeals to the Board will be heard upon the evidence in the
record which is based upon the record before the Appeals Referee.
However, the Board may direct the taking of testimony in addition to that
contained in the record of the Referee's hearing and, at its discretion,
allow the employer and/or claimant to offer additional evidence.
Decisions of the U.I. Appeal Board become final unless appealed to
Superior Court within 20 days after a decision has been rendered.
In the case of an appeal of a decision of the Appeal Board to the
Delaware Courts, judicial review thereof shall only be permitted after
the appellant has exhausted all administrative remedies. Only then may
the decision be taken to the Superior Court and further appealed to the
State Supreme Court. Appeals from the U.I. Appeal Board's decision to
the Superior Court are limited to consideration of the record, which
includes testimony before the Board and the decisions of the Referee and
Employers may also appeal annual assessment rate notices or quarterly
benefit wage charge notices by writing to the Unemployment Insurance
Division to request a review or redetermination. Appeals from assessment
rate notices go first to the Division, then to Superior Court. Appeals
from benefit wage charge notices go first to an appeals referee then to
A P P E N D I C E S
EXPLANATION OF UNEMPLOYMENT INSURANCE FORMS
A. REPORT TO DETERMINE LIABILITY AND, IF LIABLE, APPLICATION FOR
EMPLOYER ACCOUNT NUMBER
To furnish information with which the Division may establish
an employer's liability. Information must be provided
concerning the nature of business, type of organization, any
change in status, employment record for the last five years
(if any) and details of acquisition of another business so
that the Division may assign an account number and NAIC
(North American Industry Code)
This form is sent to an employer on request, or when the
Unemployment Insurance Division is informed that a firm is
doing business in Delaware.
The employer must return completed form within ten days,
whether or not employer is "covered" under the law.
COMMENTS ON THE UC-1
1. Because of the importance of this form in establishing an
employer's account, it should be typed or printed neatly.
Additional pages should be attached if additional space is
2. ITEM #3 - Report forms will be sent to an employer's
accounting firm only if the employer has submitted a power
of attorney document. If an accounting firm is listed in
this box and there is no power of attorney on file, the
reports will be sent to the address listed in Item #2.
3. ITEM #6 - The individual who fills out this form must also
include his/her own Social Security Number, address, and
percentage of ownership, if he/she is a partner, sole
proprietor or officer of the corporation.
4. ITEM #10 - Employers must include payroll information (if
any) for the current year in addition to the four preceding
5. ITEM #12(d) - Because this information is used to assign a
Standard Classification which is used to determine the tax
rate for new businesses, it is important that the percentage
of each principle type of activity be estimated as
accurately as possible. If this cannot be done, the major
activity must be specified in reasonable detail.
6. ITEM #17 - Only non-profit employers exempt from income tax
by the I.R.S. need fill out this block.
C. EMPLOYER'S QUARTERLY REPORT FORMS
FORMS UC-8, UC-8A, UC-8C AND PAYMENT COUPON
UC-8 - This quarterly report is used to calculate and report
the unemployment insurance tax due for the quarter.
UC-8A - This quarterly report is a detailed listing of
employee names, social security numbers and wages paid to
each employee during the quarter.
UC-8C - This form is to be used only when it is necessary to
notify the Division of changes in employer status or to
correct information pre-printed on Forms UC-8/8A.
Payment Coupon - This form must be completed and returned
with the employer's payment and Forms UC-8/8A.
WHEN FURNISHED BY DIVISION
March, June, September, and December of each year.
This form must be completed and filed (postmarked) on or
before the last day of the month following the appropriate
calendar quarter, i.e., January 31, April 30, July 31, and
October 31. A report must be submitted even if no wages
were paid during the calendar quarter.
Payment for any tax liability must be included.
All reports submitted for processing must include a six
digit account number (XXXXX-X). Reports submitted without a
complete account number will not be processed and will be
returned to the employer.
PENALTY FOR LATENESS
A $17.25 fine is imposed if this report is submitted more
than five days after the due date.
NOTE: Instructions for completing the UC-8 and UC-8A are
provided with the forms.
Interest accrues at the rate of 1.5% per month or fraction
thereof on assessments which are not paid on or before the
***Pursuant to HB 144 signed into law on June 18, 2007, the taxable wage base
was increased from $8,500 to $10,500 effective January 1, 2008. The
Employer’s Quarterly Report Forms that are usually located in this section of
the Employer Handbook are being updated to reflect this change and are not
yet available. This “online” version of the Employer Handbook will be updated
to include examples of the updated Employer’s Quarterly Report–Forms Set as
soon as they are available.
COMMENTS ON THE EMPLOYER'S QUARTERLY REPORT FORMS
1. Report current period wages only. Prior period corrections must be
made by adjustment application.
2. To change preprinted information on the tax report such as company
name and address, please use change report (UC-8C) included in the
quarterly report forms packet.
3. The use of nonstandard forms may cause processing delays.
4. Failure to sign and date a form may cause processing delays.
5. Our goal is to support employers’ effort to comply with reporting
requirements. If you have a question, please call (302) 761-8482.
D. QUARTERLY PAYROLL REPORT FOR REIMBURSABLE EMPLOYERS
This quarterly report is a detailed listing of employee names,
social security numbers and gross wages paid to each employee
during the quarter.
WHEN FURNISHED BY DIVISION
March, June, September and December of each year.
This form must be completed and filed (postmarked) on or before the
last day of the month following the appropriate calendar quarter,
i.e. January 31, April 30, July 31 and October 31.
PENALTY FOR LATENESS
A fine is imposed if this report is submitted more than five days
after the due date.
E. DELAWARE EMPLOYMENT TRAINING FUND
The Blue Collar Jobs Act of 1984 created a bi-annual tax for the
purpose of providing training programs.
Employers will be billed by June 30 and December 31 of each
Payment is due by July 31 and January 31 of each year.
Interest accrues at the rate of 1.5% per month or fraction
thereof on taxes not paid on or before the due date.
F. NOTICE OF CLAIM FOR BENEFITS AND REQUEST FOR SEPARATION INFORMATION
FORMS UC-119 AND UC-119C
To request reason for separation.
When a worker files a claim, the UC-119 is prepared and sent
to each base period employer. Employers are required to
indicate the reason for separation (lack of work, or other),
the last day the former employee worked, and any information
about pensions. The UC-119 is used to determine whether an
employer's account will be charged with benefit wages on the
basis of the claim. (The original form must be returned. No
copies or facsimiles will be accepted.)
The UC-119C is sent to the last employer and is used to
determine nonmonetary eligibility.
Seven 7)business days after the mailing date shown on the
form. Photocopies and facsimiles will not be accepted in
lieu of the original Form UC-119. If not received in seven
(7) days, the Agency will decide the claim on the basis of
available information, and the employer shall be barred from
claiming subsequently that relief from benefit wage charges
should be granted or that the worker should have been
disqualified from the receipt of benefits.
COMMENTS ON THE UC-119 AND UC-119C
1. The employer should be as specific as possible, attaching
additional pages if necessary, in explaining the reason why the
worker is no longer employed. For example, saying that the
employee "took a better job" is not specific enough.
2. It is important that base period employers, even though they may
not be the last employer, state specifically the reason for
separation, as they may not be charged if it can be shown that the
employee left said employment without "good cause related to the
work" or was terminated for "just cause" connected with the work.
G. NOTICE OF BENEFIT WAGES CHARGED TO EMPLOYER'S MERIT RATING ACCOUNT
To notify assessed employers of any benefit wages of former
employees charged to their accounts and/or relief of benefit
wages charged in previous calendar quarters.
Quarterly notices are sent to employers.
Request for reconsideration of benefit wage charges applied
must be submitted within 15 days from the date Form UC-12
WAGE CREDITS FOR REHIRE
To notify assessed employers of any rehire credits
applied to their accounts.
Rehire credit applications are processed upon receipt.
The employer will be notified upon determination.
Request for reconsideration of rehire credits applied
must be submitted within 15 days from the date Form
UC-401 was issued.
H. APPLICATION FOR REHIRE CREDIT
To request credit be applied to employer account
pursuant to the rehire of an employee(s).
Application must be submitted by employer to the
Department of Labor, Division of Unemployment
Insurance within the 90 day period following a
claimant's benefit year ending date.
ALTERNATIVE BASE PERIOD
If it is determined the claimant has insufficient wages in the first four of
the last five completed calendar quarters base period (illustrated above) to
become monetarily eligible for unemployment insurance compensation, Section
3302(2), Title 19, Delaware Code provides for the use of an alternative base
period. The alternative base period allows for the use of wages from the four
most recent completed calendar quarters immediately preceding the effective
date of the unemployment insurance claim. Please contact Employer Contribution
Operations if you have questions regarding alternative base period.
I. STATEMENT OF BENEFIT WAGE CREDITS FOR REHIRE
To notify assessed employers of any rehire credits
applied to their accounts.
Rehire credit applications are processed upon receipt.
The employer will be notified upon determination.
Request for reconsideration of rehire credits applied
must be submitted within 15 days from the date Form
UC-401 was issued.
J. Statement of Benefit Wage Credits for Rehire Denial
To notify assessed employers of rehire credit denials.
Daily notices are sent to employers who are denied
Request for reconsideration of denial must be submitted 15
days from the date form UC-409RC was issued.
K. NOTICE OF HEARING (INTRASTATE)
To inform the employer and claimant that an appeal has
been filed against a decision made by a claims deputy
concerning a claim for unemployment benefits and to
provide notice of the date and time of the appeals
hearing before an Appeals Referee.
HOW TO PREPARE FOR HEARING
Instructions are provided on the back of the form as
to how to prepare for the hearing. The employer and
claimant should bring evidence which bears on the case
such as wage and hour records, company policies or
written warnings issued to the employee. It may be
helpful to write down notes to take to the hearing to
prevent omitting relevant facts. Any and all
witnesses bearing relevant testimony should appear at
Attorneys may be brought to the hearing but are by no
means necessary for a fair and judicious process.
DEPARTMENT OF LABOR
DIVISION OF UNEMPLOYMENT INSURANCE
You may direct specific questions regarding benefit eligibility to these offices:
Wilmington Local Office Mailing Address
Division of Unemployment Insurance P. O. Box 9951
4425 North Market Street Wilmington, DE 19809
Wilmington, DE 19802
Newark Local Office
Division of Unemployment Insurance P. O. Box 9955
Building #225, Corporate Blvd. Wilmington, DE 19809
Pencader Corporate Center
Newark, DE 19714
Dover Local Office
Division of Unemployment Insurance P. O. Box 616
1114 S. DuPont Highway Dover, DE 19903-0616
Dover, DE 19903-0616
Georgetown Local Office
Division of Unemployment Insurance P. O. Box 548
600 N. DuPont Hwy. Georgetown, DE 19947-0548
Georgetown Professional Park
Georgetown, DE 19947
Please direct questions concerning unemployment insurance tax matters to:
Division of Unemployment Insurance
Post Office Box 9953
Wilmington, DE 19809