Utah Contractor Practice Exam

Who is responsible for paying federal unemployment insurance?

1. Employee

2. Employer

3. The state

4. All of the above

The correct answer is: Employer

The responsibility for paying federal unemployment insurance falls solely on the employer. This insurance provides temporary financial assistance to eligible workers who lose their jobs through no fault of their own. The federal unemployment tax (FUTA) is levied on employers based on their payroll, which helps fund this program. While some states also have their own unemployment insurance programs that might involve contributions from both employers and employees, the specific question regarding federal unemployment insurance delineates that the employer is the one primarily responsible for making these payments at the federal level. This distinction is important as it highlights the role of the employer in contributing to the unemployment insurance system designed to support workers in times of need.