Unemployment Insurance Handbook for Employers (UCB-201-P)
Section 2 - Tax
A "Temporary Help Company" is defined as a leasing company or temporary help service which contracts with clients or customers to supply individuals to perform services for the client or customer and which both under contract and in fact:
"Professional employer organization" means any person who is currently registered as a professional employer organization with the Department of Financial Institutions in accordance with chapter 202, who contracts to provide the nontemporary, ongoing employee workforce of more than one client under a written leasing contract, the majority of whose clients are not under the same ownership, management, or control as the person other than through the terms of the contract, and who under contract and in fact:
A common paymaster of a group of related corporations is any member thereof that pays concurrent employees of itself and one or more of the related corporations and is responsible for keeping the payroll records with respect to those concurrently employed individuals.
Concurrent employment means the existence of an employment relationship between an individual and two or more corporations at the same time.
Corporations are related for the entire calendar quarter if, at any time in that quarter, they satisfy any of the following four tests:
Payrolling is the practice of one entity reporting the wages and paying the UI tax on employees, who are directed and controlled by another entity. This practice is not allowed under the Wisconsin Unemployment Insurance Law.
Employers paying any wages through a common paymaster should report those wages through the common paymaster.
To qualify as a common paymaster the following requirements must be met:
Any of the concurrently employing related corporations could be designated as the common paymaster. The common paymaster reports the wages of the employees that work concurrently with it and one or more of the other related corporations.
If any of the above conditions are not met, then each employing unit (separate corporation) must report their own employment under their own UI account.
When your employee performs services in Wisconsin and some other state, the employee will be covered and reportable to Wisconsin if one of four tests specified in Section 108.02(15) of the statutes applies.
The four tests used by Wisconsin are:
Your employee's services are in covered employment and "localized" in Wisconsin if all of the services are performed in this state with only isolated, incidental or temporary services performed outside of Wisconsin.
If the first test does not apply, your employee's total services are covered employment in Wisconsin if some of their services are performed in this state and their "base of operations" is in Wisconsin. (Base of operations is interpreted as the place of more or less permanent nature from which your employee starts work, to which your employee customarily returns and to which you may direct instructions to your employee. It may be a branch office or the employee's residence.) Not everyone has a base of operations.
If the first two tests do not apply, your employee's total services are covered employment in Wisconsin if some of their services are performed in Wisconsin and the place from which you exercise general direction and control over the employee is in Wisconsin.
If the first three tests do not apply, your employee's total services are covered employment in Wisconsin if some of their services are performed in this state and their residence is in Wisconsin.
If, after applying all these tests you find a particular individual's services not covered in Wisconsin, you may elect to cover them in Wisconsin by filing a reciprocal agreement between Wisconsin and the other state involved. Certain states will not approve such an election if the individual has residence in that state and provides some services in that state.
Similar tests appear in the unemployment insurance laws of a majority of the states in an effort to avoid conflicts and overlapping coverage between states. However, differences in interpretation do exist among a few states.
Certain employment of United States citizens working for American employers in foreign lands (except Canada) may also be reportable for unemployment purposes to this state. Also, aliens working in Wisconsin are reportable for Unemployment Insurance purposes.
If your business legal entity is an LLC and you have elected to file as a corporation with the IRS, you must inform this department of that and provide written documentation showing that election.
Remember, by making this election, you must report and pay unemployment tax on all wages, including the LLC members. This is critical to avoid any certification problems between your State and Federal unemployment taxes.
If you have questions regarding Unique Reporting Situations, contact us at:
If there is more than one employer that has a relationship to an employee, the following should be considered in determining which of the employers is the employer:
(a) An employers right by contract and in fact to:
(b) Which employer:
There is an exception for certain employers providing home health care and personal care services funded by medical assistance allowing them to elect to be the employer of employees providing the services. To qualify for an election, the employer must meet these requirements:
Updated: September 14, 2018
Content Contact: UI Tax