An employer's tax rate may vary each year from the maximum rate to the minimum rate based on what factor?

The tax rate an employer is subject to can fluctuate each year, primarily influenced by adjustment factors. These adjustment factors are determined based on the overall performance of the unemployment insurance system within the state. If more claims are made, or if the fund balance is low, the adjustment factor can increase the tax rate, resulting in employers facing a higher rate to support the system. Conversely, when the economy is strong and there are fewer claims, the adjustment factors may lead to a lower tax rate.

Understanding the role of these adjustment factors is crucial for employers as it directly impacts their payroll expense planning and financial forecasting. Other options, while they relate to different aspects of employment and economic conditions, do not play a direct role in determining the variability of the tax rate year to year in the way adjustment factors do.