Glossary · Compliance
SUTA Dumping
An illegal practice in which employers manipulate corporate transactions to shift to a more favorable state unemployment insurance rate.
All terms
Entravia Editorial
The federal SUTA Dumping Prevention Act of 2004 and corresponding state laws prohibit transactions designed primarily to evade higher SUI rates. Penalties include rate reassessment, monetary penalties, and criminal liability.
PEO transitions can — but should not — implicate SUTA-dumping rules; CPEOs and reputable PEOs are explicit about successor-rate treatment.
Related terms
- SUI / SUTA (State Unemployment Insurance)State payroll tax that funds unemployment benefits. Rates are experience-rated based on an employer's claims history.
- CPEO (Certified PEO)A PEO certified by the IRS under the Small Business Efficiency Act, providing client businesses explicit federal employment-tax liability assurance.
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