The unemployment insurance (UI) system in the United States is a federal and state program. In California, employers finance the cost of the program through state and federal UI taxes. You can substantially reduce the UI tax you pay by carefully monitoring the Employment Development Department (EDD) tax bills and protesting claims by ineligible former employees. The UI tax is one of the few employment-based taxes that you can reduce.
This section explains how UI is financed and which wages are subject to UI taxation. You will learn which employers are covered and what the employer obligations are. This section also discusses UI claims, how to respond to them and how UI interacts with other benefits, such as vacation pay.