What does FUTA stand for?

The correct answer, Federal Unemployment Tax Act, refers to a U.S. federal law that establishes a system for financing unemployment compensation for workers who have lost their jobs. This act is crucial in the context of employment as it outlines how taxes are collected from employers to fund unemployment benefits.

Under this act, employers pay a federal unemployment tax on the wages they pay to employees, which contributes to a federal unemployment insurance program. The purpose of the FUTA is to ensure that there is a safety net for those who are unemployed, providing them with temporary financial assistance while they search for new job opportunities.

The other options do not accurately represent the established federal law concerning unemployment taxation and benefits. Understanding the FUTA is essential for anyone working in the fields of human resources, tax preparation, or any profession involved in employment and labor law.