SUTA dumping, or State Unemployment Tax Avoidance, typically involves the creation of a new business entity and the transfer of payroll between the old and new entities to reduce unemployment insurance rates.
President Bush recently signed H.R. 3463, the SUTA Dumping Prevention Act of 2004, which is designed to discourage SUTA dumping. The new law requires states to conform as soon as possible and it's likely California will conform sooner, rather than later.
H.R. 3463 ...