April 2021

Kansas unemployment tax rates will be determined with one of 13 tax rate schedules created to maintain the balance of the state unemployment trust fund, under a measure signed April 26, 2021 by Governor Laura Kelly.

The measure ( H.B. 2196 ), effective with tax rates determined for 2022, states that tax rates may be determined using a standard rate schedule, one of six solvency rate schedules, or one of six credit schedules. The schedule in effect is to continue to be determined by the state’s average high cost multiple, an estimate of the number of years that the trust fund could support unemployment benefit payments without the state needing to raise additional revenue or borrow additional funds.

When a solvency rate schedule is in effect, unemployment tax rates are to increase relative to the standard rate schedule, and when a credit schedule is in effect, tax rates are to decrease relative to the standard rate schedule.

The standard rate schedule is to be in effect when neither a solvency adjustment nor credit adjustment is in effect.  Under the standard schedule, tax rates range from 0.20% to 5.40% for positive-rated employers and from 5.60% to 7.60% for negative-rated employers.

The measure also expands employee eligibility for participation in the state shared-work program.  Employers may reduce the weekly hours and wages of participating employees by 10% to 50% of their normal work hours, whereas employers previously were required to reduce hours and wages by 20% to 40%.

Additionally, negative-rated employers will now be able to participate in the shared-work program when the employer’s most recently calculated reserve ratio has improved from the previous year’s reserve ratio.  Prior to this measure, negative-rated employers were not allowed to take part in the shared-work program.

As always, we will continue to monitor this situation and provide updates as they become available.  If there are any questions please do not hesitate to contact us or visit our website for the latest news and updates.

The Kentucky House of Representatives has passed House Bill 413, retroactively lowering 2021 unemployment tax rates for all employers in the state.

House Bill 413 was introduced on February 9, 2021 and the bill received full support from the Economic Development & Workforce Investment Committee as well as employers within the state who have seen a drastic increase in their state unemployment tax rates from 2020 to 2021.

HB 413 freezes the UI tax rate schedule at Schedule A for 2021; a decrease from the originally assigned Schedule E.  This allows rates to return to 2020 levels providing relief to all experience-rated employers.  Due to this change, tax rates will range from 0.30% to 9.00%.  The new-employer tax rate will remain at 2.70% for 2021.

Additionally, HB 413 will decrease the 2021 unemployment taxable wage base from $11,100 to $10,800.

One issue remains: Will the Kentucky Division of Unemployment Insurance be able to generate and issue revised 2021 tax rate notices for all employer prior to the first quarter 2021 filing and payment deadline of April 30, 2021?  In speaking with representatives at the Division, the expectation is to send out these revisions “in the next couple of weeks”.  In the absence of a revised tax rate notice reflecting the employer’s newly lowered rate for 2021, the Division has provided guidance indicating that employers should pay at their originally assigned rate under Schedule E.  That will generate an overpayment on the employer’s account and at that point, the employer can either use that overpayment toward future tax liabilities or a refund can be requested via the agency website.

As always, we will continue to monitor this situation and provide updates as they become available.  If there are any questions please do not hesitate to contact us or visit our website at www.thomas-and-company.com.

The North Carolina Senate has passed Senate Bill 114, retroactively lowering 2021 unemployment tax rates for all employers in the state.

Senate Bill 114 was introduced in the February 17, 2021 General Assembly Session by the North Carolina Unemployment Oversight Committee.  This bill received full support from the North Carolina Division of Employment Security as well as employers within the state who have seen a drastic increase in their state unemployment tax rates from 2020 to 2021.  All this even though the NC DES excluded COVID-related benefit charges from the 2021 tax rate calculation.

SB 114 reduces the base contribution rate from 2.40% to 1.90% thus causing rates to fall back to 2020, pre-pandemic levels.  This may result in an unemployment insurance tax rate reduction of up to 0.50% for each active, experience-rated employer.  The North Carolina Department of Employment Security has begun recalculating tax rate based on this change and the target date of issuance is April 12, 2021.  Important items to note are as follows:

• Employers who are affected by this change will receive a revised 2021 Tax Rate Notice by mail. For our clients, those revisions will be mailed to our office and we will send them out to you upon review and verification.
• Employers whose tax rate for 2021 is already at the minimum rate allowed by law (0.06%) will not be affected by this change and will not receive a revised notice.
• Employers whose tax rate for 2021 is already at the maximum rate allowed by law (5.76%) may or may not receive a rate reduction, depending on individual recalculation results.
• Employers who have the new-employer rate (1.00%) will not be affected by this change and will not receive a revised notice.

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