Experience rating is
A) assigning a higher UI tax to employers who lay off workers frequently.
B) assigning a higher UI tax to employers who have a large number of experienced workers.
C) assigning a higher UI tax to employers who have a large number of inexperienced workers.
D) assigning a higher UI tax to employers who have not been in business for very long because these businesses are likely to fail.

Question

Quizplus · Accepted Answer

Experience rating is a process of assigning a higher or lower unemployment insurance (UI) tax rate to an employer based on their experience with unemployment. This is designed to encourage employers to reduce layoffs and promote stability in the workforce. Employers who lay off workers more frequently are assigned a higher UI tax rate as they are considered to be a greater risk to contribute to unemployment. Therefore, option A is the best choice.

Experience Rating Is