by 
The Curious Bag
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As of 2009, every state in the nation administers a financial safety net for displaced workers called state unemployment insurance. States fund this by charging an unemployment tax.
Identification
A state unemployment tax goes to a state's unemployment insurance fund, which gives monetary benefits to people temporarily and involuntarily out of work to pay for essentials, such as food and housing.
Features
States calculate the unemployment tax based on the business' longevity, the type of industry it operates and the number of terminated employees who qualify for state unemployment benefits. New employers are charged a special rate until the state gathers statistics on how often the company's employees experience involuntary unemployment.
Function
States charge a higher unemployment tax on a particular business as more of its employees file unemployment insurance claims. This gives incentive to businesses to keep employees on the payroll.
Considerations
Employers may not pass this tax onto employees, known as withholding, except in Alaska and New Jersey, as of 2009.
Tips
In order to gain the perception as a good employer, businesses should only hire stellar applicants whom they plan to keep on board.
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