Less than one-half the States provide unemployment insurance coverage for employees of firme employing one or more workers.

Distribution of States by Minimum Size-of-Firm Provision in
State Unemployment Insurance Laws, Selected Dates, 1937-1969

Size-of-firm

Number of States with specified size-of-firm provision on December 31,

April

1/ In most States, specified number of workers must be employed for stated period during a calendar year (usually 20 weeks). In some States the size of an employer's payroll is an alternative, additional, or sole factor in establishing whether or not he is subject.

2/ Federal law amended in 1954 reducing minimum size-of-firm subject to coverage from 8 or more to 4 or more.

3/ Includes Michigan: changed coverage to one or more in 20 weeks, effective 1966.

4/ Includes Puerto Rico: one or more effective 1/1/78.

July 14, 1969

In commerce and industry, thirty-one percent of all employere and four percent of all employment remain outside State wremployment inscrevce systems.

Estimated Pumber and Percent of all Pirms / and Employment 3/ Excluded
from Coverage under State Unemployment Insurance Laws by State

Fercent of
employers in
each State

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Vermont
Virginia
Washington
West Virginia
Visconsin
Wyaning

in 20 weeks

1 at any time

in 20 weeks
im 20
$500

firm is one with less than four employees.

Estimates based on unpublished data for ploying units reporting fever than four employees under social security coverage
seni) in mid-March 1965, but who had at least one employee during the Jamanry through March quarter. Some employing mits
no employees in mid-March. Therefore, the number of employing its my exceed the number of employees.
Bise of firm provision as of March 1, 1969. Estimates do not reflect alterative conditions in some States.

Law specifies one ployee and amount of payroll shown.

For alterative conditions, see Table CT-1, Comparison of State Unemployment Insurance Lave, 38 Bo. U-141.

Employers of four or more in 20 weeks outside corporate limits of city, village, or borough of 10,000 population or more.
One at any time, effective January 1, 1970.

Rounded to searest thousand. Sm of parts does not equal total. Total adjusted to include estimated number of employers
oyment excluded under States memployment insurance laws in six States where individual State estimates are not
temimble. (Bee footnote 9/)

Estimates under present sine of firm restriction not determinable.

July 30, 1969

Less than one-half of one percent.

Many States now have a broader definition of employer than the Federal
Law. The proposed definition of employer as one with a $300 quarterly
payroll would add more covered employment to the Federal law (FUTA)
that to State unemployment insurance laws.

Estimated Number of Firms and Employment Added to Unemployment Insurance
Coverage by Proposed Change in Definition of Employer 1/2/

1/Estimates based on unpublished data for employing units reporting fewer than four employees under social security coverage (OASDEI) in mid-March, 1965.

2/ A coverage provision of 1 or more in 20 weeks (or with a quarterly payroll of $1,500) would affect about 601,000 fever employers and 553,000 fever employees under the FUTA and about 364,000 fever employers and 337,000 employees under State unemployment insurance laws than the present coverage proposal. The number added under the FUTA would be about 1,000,000 employers and 2,301,000 employees. About 491,000 employers and 1,132,000 employees would be added under State unemployment insurance laws.

3/ Employer figures include all reporting units who had at least one employee during the January-March, 1965 quarter. Some such units had no employees in mid-March. Therefore, the number of reporting units exceeds the number of employees.

Source: Department of Labor, Unemployment Insurance Service.

September 19, 1969

108

Small firms have a greater concentration of Taxable Wages at State minimen and State maximen tax rates than do other firms.

Includes only employers rated under the experience rating provisions of State laws; small firms are limited to those with an annual payroll of less than $10,000; more than 90 percent of the payrolls of small firms, as defined, are concentrated in the 23 States that cover employers of one or more workers. However, even in those States that limit coverage to employers of 4 or more workers there are firms with less than 4 workers that are covered for various reasons: elective coverage, employers who had more than 4 workers in prior years but in the current year have less than 4, multi-State employers who have more than 4 workers but less than 4 workers in a given State.

35-277 069

July 30, 1969

Available data strongly indicate that workers in small firms need protection against the risk of unemployment as do workers in large firms.

Beneficiary Experience of Workers from Small and Large Firms, 1
States Covering Employers of One or More Workers

1/ Small firms are those with fewer than four workers and large firms are those with four or more workers except for Idaho, New York and Wyoming, in which small firms are those with taxable payrolls under $10,000 for the year.

2/ Based on relationship between the average number of covered workers in a month and the number of beneficiaries during the year.

Comparable data not available.

Source: UIS, data for other States covering mall firms are not available.

September 17, 1969