Virgin Islands Government seal

Department of Labor

Unemployment Insurance

Introduction & Background

Important Highlights

Contributions

Federal Unemployment Tax Act (FUTA)

Experience Rating

Reimbursing Employers

Records, Reports, and Audits

Independent Contractors

Localized and Non-Localized Employment

Reciprocal Coverage

Combined Wage Claims

Interstate Claims

Benefit Payment Program

Employment Service

Forms

Glossary

FAQ'S

Contributions


Who is liable?

Employing Units for which one or more individuals perform services at any time in "employment," as defined in the law, are normally subject to contributions. The services may be performed full-time or part-time, by adults or minors.

If individuals perform personal or domestic service in a private home or in a local college club, fraternity, or sorority and the aggregate payroll in that location equals or exceeds $500.00 in remuneration in a calendar quarter in the current or preceding calendar year, the employees are in covered employment and their wages are normally subject to contributions.

Wages

The term "wages" for the purpose of unemployment insurance under the Virgin Islands law means any remuneration for personal services. The term includes tips, commissions, bonuses, the cash value of meals, lodging, laundry, and other means of payment for employment. Wages are reportable by employers in regard to the quarter when paid.

The following payments are a few examples of those not considered to be wages

  • The employer's share of contributions to a fund under a plan or system for retirement benefits or health and life insurance.
  • Courtesy discounts on purchases.
  • Sick pay paid under a third party plan or system.
  • Travel expenses actually incurred and paid.

Household Employee Coverage

The Virgin Islands law provides unemployment insurance protection for household employees, which is also financed by their employers normally through contributions, similarly to other employers.

If you pay less than $500.00 in cash wages in any calendar quarter, you have no liability for that quarter. You must still file the quarterly report showing no employees. If you do not intend to have employees in the future, you can request that your account be terminated. You will no longer be required to file reports as an employer.

Exempt Services

Examples are given below of types of work which are not subject to contributions or reimbursements.

  • Services performed by an individual under 18 years of age as a babysitter.
  • Services performed not in the course of an employer's trade or business.
  • Services performed by an individual in the employ of a son, daughter, or spouse. Service by a child under 21 in the employ of a parent.
  • Service as an insurance solicitor or agent if entirely on commission.
  • Services performed in the employ of a church or convention or association of churches or an organization which is operated primarily for religious purposes.
  • Workers who are hired as part of an unemployment work-relief or training program assisted or financed by any Federal or State agency or political subdivision thereof.
  • Services performed in the employ of a foreign government.
  • Employees of international organizations.

The foregoing list is not complete. If you have any questions about coverage and exemption of particular services, please contact the Agency.

Voluntary Election of Coverage

An employing unit not otherwise subject to the coverage provisions of the law may elect to become a covered employer. Such election must be requested in writing and approved by the Agency. Such election must cover an initial minimum period of two calendar years. Continuing coverage is automatic yearly thereafter, unless action is taken by the employer or by this Agency to cancel the agreement. Employers who elect to be covered are subject to all provisions of the law.

Date of Liability
An employer becomes liable when he first pays wages for covered services in the Virgin Islands, and the liability then applies to the entire calendar year beginning January 1.

Termination of Coverage

An employer can terminate his liability when the coverage requirements are no longer met under the law. The agency should be notified in writing when that occurs.

Employers who become liable by voluntary election may not terminate coverage until two full calendar years have passed since election of coverage.