1. Purpose.To transmit the Experience Rating Index (ERI) for states for rate year 2003.
2. References.Unemployment Insurance Program Letter (UIPL) No. 3-92, UIPL No. 37-93, UIPL No. 40-94, UIPL No. 32-95, UIPL No. 25-96, UIPL No.13-98, UIPL No. 5-99 and UIPL No. 26-03.
3. Background.The referenced UIPLs published the ERI for Rate Years 1988 - 2002. This UIPL continues the ERI series.
Experience rating is the system by which tax rates vary in relation to an employer's experience with unemployment. Experience rating has three major objectives: to serve as an incentive to stabilize employment, to produce proper allocation of the cost of unemployment benefits and to encourage employer participation in the program. The Experience Rating Index attempts to measure the degree of experience rating in states' Unemployment Insurance systems by determining the proportion of benefits that are effectively charged to employers. Effectively charged benefits are those benefits that are charged to the beneficiaries' former employer(s) and paid for by that employer. Attachment I shows the historical series of the ERI from rate year 1988 to rate year 2003 for all states. Attachment II shows the ERI for rate year 2003 and the values used to calculate the ERI. Attachment III describes how the ERI is calculated and defines ineffective charges, inactive charges and noncharges. The higher the ERI, the greater the degree of experience rating.
4. Action Required. Please distribute to appropriate staff.
5. Inquiries. Direct inquiries to the appropriate Regional Office.
6. Attachments.
- Experience Rating Index by State for Rate Years 1988 - 2003.
- Experience Rating Index by State for Rate Year 2003.
- Calculation of Experience Rating Index.
| RESCISSIONS | EXPIRATION DATE |
| None | March 31, 2006 |