What practice involves a company obtaining multiple account numbers to lower their unemployment insurance rate?

The practice that involves a company obtaining multiple account numbers to lower their unemployment insurance rate is known as SUTA Dumping. This term refers to the strategy some businesses employ to reduce their state unemployment tax obligations by manipulating their experience rating, often through the creation of multiple entities or accounts. By doing so, these companies can effectively lower their taxable rate, allowing them to pay less in unemployment insurance costs than they otherwise would.

SUTA Dumping is considered a form of fraud because it undermines the intended structure of unemployment insurance programs, which are designed to help fund benefits for laid-off workers based on an employer’s true experience with unemployment claims. This manipulation can be detrimental to the overall funding of these essential programs, as it shifts the financial burden onto legitimate employers who do not engage in such practices.

In contrast, employee sharing pertains to arrangements where employees are shared among multiple employers, which does not involve manipulating account numbers. FICO Dumping is not a recognized term related to unemployment insurance and usually relates to credit scoring. Value Engineering is focused on improving the value of a project or product by analyzing its functions and is not related to unemployment insurance taxes.