Submitted by: SCDEW
This article originally appeared in the Summer 2024 issue of the South Carolina CPA Report

Employers who hire a Third-Party Administrator (TPA) to communicate with the S.C. Department of Employment and Workforce (DEW) on their behalf may not understand their ultimate responsibility to oversee the process. DEW informs and reminds employers of this regularly, but TPAs can easily support these efforts, protecting client relationships from misunderstandings. Taking a few minutes each quarter to review and update everyone’s contact information is critical to providing accurate and timely responses, reporting, and payments.

On the legislative front, DEW heard you! We’ve got good news to share for employers paying higher taxes because of a lien, but first, here are simple steps to prevent costly lapses in communication.

Do you know that out-of-date contact information can cost employers money and TPA clients?
Notably, DEW provides two systems for employers and TPAs to interact with the agency.

One is DEW’s online employer tax portal, the State Unemployment Insurance System (SUITS), which pertains to the employer’s Unemployment Insurance (UI) tax, such as quarterly wage reports, tax payments, and related communication. The other is the Employer Self-Service Portal (ESS), through which an employer communicates about UI benefits paid to employees or former employees.

Without up-to-date contact information for employers in either system, DEW’s communications may not reach the correct person in time, which can result in significant penalties.

Frequent turnover or temporary absences, such as medical, military, or family-care absences, of key staff members can become costly to an employer. Therefore, employers should log into the SUITS and ESS systems at least quarterly to update their contacts so that no payments or responses are submitted after a deadline. TPAs should also schedule a quarterly review of the roles and responsibilities of their staff, as well as an employer’s staff and leadership, to confirm who is responsible for each required process. To review and update these fields in SUITS, go to https://uitax.dew.sc.gov/. To review and update these fields in ESS, go to https://scuihub.dew.sc.gov/ESS.

Penalty Tax Rate Relief for Employers Paying on Approved Installment Plans
Employers can thank SCACPA for advocating to reduce the UI tax class rate for those paying on approved payment plans on delinquent accounts! DEW and state legislators listened to employers’ concerns, resulting in a new amendment (H. 3992) to Section 41-31-60(B) signed into law in May 2024 and providing significant relief now. Previously, employers with an active lien for outstanding UI taxes had to pay future quarters at the highest Tax Class 20 rate until they paid their lien in full. With this change in law, employers with an active lien can pay future quarters at their lower calculated rate if they are in an approved installment payment agreement.

What does this mean?
Sample Scenario Before H. 3992
An employer normally taxed at rate class three (effective rate of 0.196 percent for a maximum cost per employee per year of $27.44) with 25 employees (each making at least $14,000 annually) would pay $686 in UI taxes that year. If this employer or representative fails to pay the employer’s UI taxes, DEW will file a lien if the underpayment is not paid within ten days. The next quarter, under Section 41-31-60(B), the employer’s rate would have increased from 0.196 percent to 5.46 percent, increasing the annual maximum cost per employee from $27.44 to $764.40. Let’s say the employer did not discover the issue for a year and, at that time, has a debt over $20,000.

If the employer cannot pay the $20,000 all at once, they could call DEW to work out a payment agreement in which the employer will pay $2,000, followed by 12 monthly installments of $1,500 each. However, that employer would still have to pay future quarters during that 12-month plan at the higher 5.46 percent rate.

Same Sample Scenario After H. 3992
Now, under Section 41-31-60(B) as amended by H. 3992, for each new quarter that begins during the 12-month plan, the employer would be taxed at their typically calculated rate of 0.196 percent and, therefore, only have $686 in new UI tax over the year to pay (in addition to their agreed-upon monthly payments)—a savings of $18,464.

How do employers get an installment payment agreement? We’re here to help!
Employers can request a payment plan by logging into SUITS, clicking on “Payments” on the left-hand menu bar, and then clicking on “Request Payment Plan.” They can also call 1.866.831.1724 for help and to ask questions. Decisions about eligibility and terms are made based on factors such as the size of the debt, account history, and mitigating circumstances unique to each case.