Certain industries experience variations in the number of workers employed during the year due to the seasonal nature of the work involved. If an industry is determined to be “seasonal” then wages paid to seasonal workers may only be used to pay unemployment insurance benefits if the worker is unemployed during the season. By limiting the use of the seasonal wages a seasonal employer may be able to maintain a lower unemployment tax rate. Currently, there are 29 seasonal industries designated in Arkansas.
Any employer may make a written request that the Director of the Department of Workforce Services issue a seasonal designation for its particular industry. Upon receipt of the request DWS conducts a study of all employers in the particular industry. If it is found that the industry customarily lays off 40% or more of its workers for at least four consecutive months the seasonal designation is assigned to the industry. The seasonal designation begins the following January 1st. Once the seasonal designation is issued all employers within the industry are notified of the change. If an employer wishes to avoid the seasonal designation it may opt out by providing written notification to DWS. If an employer opts out the seasonal designation is removed the following January 1st.
Once an employer begins reporting as a seasonal employer it must report wages either as paid “in-season” or “out of season” DWS provides the seasonal employers with the dates of the season. In most instances the seasonal period does not fall within exact calendar quarters and employers must be careful to correctly report both the in-season and out-of-season wages when filing the quarterly unemployment insurance contribution reports.
There is a possibility that some employees of a seasonal employer that work substantially throughout the year may have enough wage credits in the out-of-season period to be eligible to draw benefits as a non-seasonal employee even though they worked for a seasonal employer. DWS personnel determine this issue during the claim filing process.
Questions concerning the seasonal designation or UI tax questions in general may be addressed by calling the UI Contributions Section at 501-682-3253.