Monthly Archives

July 2020

Unemployment Weekly Claims Report for the Week-Ending July 18, 2020

The Unemployment Insurance Weekly Claims report for the week ending July 18, 2020 has been released by the Department of Labor.

  • Seasonally adjusted initial claims: 1,416,000
  • 4 week moving average: 1,360,250
  • Seasonally adjusted insured unemployment rate: 11.1%
  • Seasonally adjusted insured unemployment number: 16,197,000
  • 4-week moving average: 17,505,250
  • Number of unadjusted claims: 1,370,947
  • Unadjusted insured unemployment rate: 11.2%
  • Unadjusted number claiming UI benefits: 16,390,919

The full news release report can be downloaded here.

 

Our office will monitor COVID-19 updates closely and will send out additional announcements as we become aware of any updates. You can also review these updates on our website at https://www.thomas-and-company.com/covid-19/ too.

Please reach out to your representative with any questions.

 

COVID-19 Pandemic Relief Legislation: Update on the Extension (or Expansion) of the CARES Act

As both parties continue negotiations on continued virus relief, Republicans announced their own plan for a new U.S. virus-relief bill broadly endorsing a fresh round of stimulus checks to individuals, extended supplemental unemployment benefits and additional funding for COVID-19 testing while also voicing doubts over President Trump’s desire for a payroll tax cut.

The details remain in flux as GOP senators hashed out their opening bid in negotiations with Democrats on legislation to prop up the slowed U.S. economy. The differences between the GOP and the White House regarding the payroll tax cut threatens to push any action on the stimulus into August.

Treasury Secretary Steven Mnuchin and White House Chief of Staff Mark Meadows started this week by saying their goal was to get a stimulus bill out of Congress by the end of next week (July 31st). But after getting pushback from Senate Republicans on several issues, including the payroll tax cut, both ended the day Tuesday dialing back expectations.

Mnuchin and Meadows met Tuesday (July 21st) over lunch with Republican Senators, but no outline for legislation emerged. Louisiana Republican Senator John Kennedy said the two Trump advisers discussed a lot of ideas, but “we haven’t reached a conclusion on anything.”

Democrat Senators Chuck Schumer and Nancy Pelosi said the lack of consensus among Republicans means real negotiations cannot start yet to bridge the differences between the GOP plan for $1 trillion in stimulus funds and the Democrats’ proposal for a $3.5 trillion package.

All the while, President Trump has expressed confidence that a deal will emerge saying “We’re working very hard on it, we’re making a lot of progress. I know that both sides want to get it done.”

The White House and Congress have only a few weeks to come up with another stimulus package before lawmakers take a scheduled August break and the $2.9 trillion flood of federal money passed by Congress earlier in the year begins to dry up.

The crux for Republicans is the President’s insistence on cutting or suspending the payroll tax paid by employers and employees, which funds Social Security and Medicare.

Mnuchin said it would be included in the Republican proposal, but some GOP senators, such as South Dakota’s John Thune, said they remain skeptical. Thune has stated “I’m not a fan of that. If it’s a choice between doing checks and payroll tax cut, I think it’s pretty clear the checks actually have a more direct benefit to the economy.”

Although Trump has suggested he might not sign a bill without the payroll tax cut, Mnuchin and Meadows indicated some flexibility in talks.

There are signs of a possible compromise on extending the supplemental unemployment insurance that was part of the stimulus measure passed in March and is set to expire on July 31st.

Section 2104 of the CARES Act provided individuals who were unemployed as a result of COVID-19, $600 a week in additional unemployment benefits, completely funded by the federal government. Republicans argued it created a disincentive for returning to work in some areas because unemployed individuals could get more than they earned at their jobs. Thus, some GOP lawmakers have floated the idea of lowering the supplement to $200 or $400 as part of the new package.

White House Press Secretary Kayleigh McEnany has said that the administration favors some type of additional unemployment aid, along with direct checks to individuals and a payroll-tax holiday for middle and low-income Americans.

Senate Majority Leader Mitch McConnell said the GOP plan will include a second round of the Paycheck Protection Program for small businesses, but it would be targeted to businesses most affected by the pandemic. He said there will be funding to reimburse businesses for the costs of safe workplaces, including personal protective equipment, virus testing, cleaning and remodeling to protect workers and entice customers. Additionally, there also will be money for some child-care assistance and funding for a vaccine. The Republican plan also will have $105 billion to aid schools in safely reopening.

As always, if there are any questions please do not hesitate to contact us or visit our website at www.thomas-and-company.com.

Colorado Unemployment Taxable Wage Base to Gradually Increase Until 2026

The Colorado Department of Labor & Employment announced that the unemployment taxable wage base is set to more than double by 2026 under legislation that also expanded the state shared-work program and unemployment benefit eligibility.

Under Senate Bill 207, signed into law by Governor Jared Polis on July 14th, the wage base is to remain at $13,600 in 2021, unchanged from 2020. Then, the wage base is then set to rise to $17,000 for 2022; $20,400 for 2023; 23,800 for 2024; and $27,200 for 2025. Effective Jan. 1, 2026, the wage base is to be $30,600 and will then be annually adjusted moving forward driven by the percentage change in the state’s average weekly wage.

Employers are not to be assessed a solvency surcharge for 2021 or 2022, regardless of the balance of the unemployment trust fund.

Among the measure’s other provisions, which took effect July 14, 2020:

  • Negative-rated employers are no longer ineligible to participate in the state’s shared-work program.
  • The amount of time within which an employer must respond to separation information requests was reduced to seven days from 12 days.
  • Workers are entitled to unemployment benefits when they separate from work because an employer is noncompliant government guidelines concerning disease prevention, to care for a quarantined or ill family member, or to care for a child enrolled in a school that closed because of a public health emergency.
  • Effective until Sept. 1, 2022, the amount of wages a worker may earn before unemployment benefits are reduced is increased. Wages exceeding 50% of a worker’s weekly benefit amount, up from 25%, are deducted from the weekly benefit.

As always, if there are any questions please do not hesitate to contact us or visit our website at www.thomas-and-company.com.

COVID-19 and Future Unemployment Tax Rates

As we all experienced in one way or another, many state unemployment agencies had difficulty managing the drastic increases in unemployment compensation claims arising from the COVID-19 pandemic. Just as state agencies are catching up with UI benefit payment issues, many are also having difficulty matching benefit charges with employer’s accounts. The additional $600 payment required under Section 2104 of the CARES Act and the state by state emergency orders issued for “non-charging” of employer accounts have created additional challenges in this regard and provided little time for state agencies to make changes in their systems to accommodate employers.

State unemployment taxes in 2021 and 2022 are likely to increase, whether it be due to individual employer’s experience history or a depletion in state unemployment trust funds. Regardless, employers and state agencies should be careful in reviewing charges to employer accounts to ensure compliance with federal and state laws.

In most states, contribution rates for 2021 are based on unemployment claims filed and benefits payments for the one-year period ending June 30, 2020. State agencies are now faced with the difficult task of reconciling the benefits paid with employer account charges identified for COVID-19-related claim payments. State unemployment compensation charge statements should be closely reviewed with respect to a number of questions related to federal and state laws and special COVID-19 related provisions, including but not limited to:

  1. The extra $600 paid as Federal Pandemic Unemployment Compensation (FPUC) under Section 2104 of the CARES Act should not be charged to employer accounts. This applies not only to the most recent separating employer accounts but also to non-separating base period only chargeable accounts. The $600 charge may not show up as a separate charge but may be included in total charges.
  2. Employer accounts should not be charged for unemployment compensation related to COVID-19 as provided in Executive Orders from Governors and/or state legislative bodies adopted to provide relief from COVID-19 related unemployment claims.

Requests for relief of charges should be submitted in a timely manner to state agencies to enable corrections to be made as early as possible and thereby avoid long-term impacts on future tax rate calculations.

Additionally, contribution rates for 2021 that are typically released between November & February should be reviewed for timely appeal. In the event that any discrepancy is identified, an issue should be raised immediately to avoid erroneous factors used in tax rate assignment.

Unfortunately, the delay in payment of unemployment compensation and the complex programming required for proper charging of employer accounts may take time to sort out by state agencies. Even if there is non-charging of benefits to individual employer accounts due to COVID-19, there may also be increases in 2021 and 2022 due to the impact of lower average payroll used to determine rates. The extent of additional taxes for 2021 may not be determined until the end of 2020. Employers and states should be working through these details to assure that the appropriate charges, payments and contribution rates are determined under the applicable laws.

The last point to consider relates to additional increases in UI taxes specifically relating to federal unemployment taxes (FUTA). Many state UI trust funds have been depleted and this may trigger solvency tax increases and interest on Title XII federal loans in years to come. Our office is monitoring this matter, as we did during The Great Recession, and will continue to provide updates on this as they become available.

As always, if there are any questions please do not hesitate to contact us or visit our website at www.thomas-and-company.com.

Iowa Unemployment Taxable Wage Base to Rise in 2021

The Iowa Department of Workforce Development announced today that the unemployment taxable wage base is set to rise to $32,400 in 2021, up from $31,600 in 2020.

The change to the taxable wage base takes effect Jan. 1, 2021.

The Department’s unemployment tax rates for 2021 are expected to be finalized in December.

As always, if there are any questions please do not hesitate to contact us or visit our website at www.thomas-and-company.com.

New Hampshire Unemployment Tax Rates to Rise for the Third Quarter of 2020

The New Hampshire Employment Security Department announced on July 17th that unemployment tax rates will increase for the third quarter of 2020.

The balance of the state unemployment insurance trust fund fell to less than $250 million for the second quarter, triggering a rise in tax rates, the Department said on its website.

Tax rates for the third quarter range from 0.10% to 2.70% for positive-rated employers and from 4.30% to 8.50% for negative-rated employers. For the second quarter, rates ranged from 0.10% to 1.70% for positive-rated employers and from 3.30% to 7.50% for negative-rated employers.

The tax rate for new employers is 2.70%, up from 1.70%.

Tax rates for positive-rated employers and new employers included a solvency-threshold tax rate reduction of 1.00% for the second quarter but this has now triggered off. A surcharge of 1.50%, which was in effect for the second quarter at 0.50%, is included in tax rates for negative-rated employers.

As always, if there are any questions please do not hesitate to contact us or visit our website at www.thomas-and-company.com.

New Jersey Unemployment Tax Rates Hold Steady for 2020/2021

The New Jersey Department of Labor and Workforce Development has confirmed that unemployment tax rates for the one-year period beginning July 1, 2020 will remain the same as the prior period.

Effective July 1, 2020, New Jersey’s experienced-employer unemployment tax rates are to be determined with Table B and are to range from 0.40% to 5.40%.

The general unemployment tax rate for new employers is to remain at 2.80% during this period.

New Jersey is one of four states that generally determines unemployment tax rates on a fiscal-year basis.

As always, if there are any questions please do not hesitate to contact us or visit our website at www.thomas-and-company.com.

Culture during COVID-19

I don’t believe any company was truly prepared for this pandemic.  However, I would argue that companies with a strong culture are better equipped to face such an obstacle.

“The obstacle in the path becomes the path. Never forget, within every obstacle is an opportunity to improve our condition.” ~ Ryan Holiday (Author)

Building a business one client at a time over 25 years has many advantages. For our clients it means they receive the best service from the best people in the industry. For our associates it means they work with a team that is fully invested in enabling their success and they can count on leadership to always have their best interests at heart. Below are some highlights of what we’ve done and how they helped us not only survive but thrive during these unprecedented times.

Purpose & Values

All the decisions we make are based off our purpose and values.  How will we “Enable the Success” of our colleagues while doing the same for our clients?  Easy.  Live out our core values.

Communication

During times of uncertainty you must communicate effectively with colleagues.  Luckily, we have an intranet platform that aides in our communication.  Not only were we informing our colleagues but building trust on how leadership was managing this new environment.

Appreciation

Our Solidarity Shout-Out program makes peer to peer appreciation easy and accessible.  When you have colleagues going above and beyond daily, it’s important to share how much the company values their work.  It was an easy decision to give each colleague a gift card to show our appreciation.  As the days working from home turned to weeks, we followed up with flowers, motivational cards, meditation cards, and even T&C custom face masks.

Meeting Their Needs

Truly listening to our employees. Focus on their needs and proactively address their concerns.  Software updates, hardware updates, and attracting additional talent.  Another need was connectivity with teammates we once connected with on a daily basis.  Yes, we did some Zoom happy hours.  We also created videos using Zoom to spread some good vibes.  A ‘Good Vibes Only’ video series where we interviewed colleagues and allowed them to share their good vibes message to teammates or even sing us a song.

Culture has always been one a differentiator for our organization.  This pandemic was simply an opportunity to highlight and strengthen our culture.

Unemployment Weekly Claims Report for the Week-Ending July 4, 2020

The Unemployment Insurance Weekly Claims report for the week ending July 4, 2020 has been released by the Department of Labor.

  • Seasonally adjusted initial claims: 1,314,000
  • 4 week moving average: 19,085, 500
  • Seasonally adjusted insured unemployment rate: 11.5%
  • Seasonally adjusted insured unemployment number: 18,062,000
  • 4-week moving average: 19,085,000
  • Number of unadjusted claims: 1,399,699
  • Unadjusted insured unemployment rate: 11.5%
  • Unadjusted number claiming UI benefits: 16,797,353

 

The full news release report can be downloaded here.

 

Our office will monitor COVID-19 updates closely and will send out additional announcements as we become aware of any updates. You can also review these updates on our website at https://www.thomas-and-company.com/covid-19/ too.

Please reach out to your representative with any questions.