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Josh Kendall

Iowa Unemployment Tax Rates Hold Steady for 2022

Governor Kim Reynolds announced that unemployment insurance tax rates for Iowa employers will remain unchanged for 2022 in a press release by the Iowa Workforce Development Department.

Effective for 2022, unchanged from 2021, tax rates will be calculated using Tax Table 7, with total tax rates for experience-rated employers ranging from 0.00% to 7.50%.  Additionally, the total tax rate for new non-construction employers will be 1.00% and the total tax rate for new construction employers will be 7.50%.

“Remaining in Tax Table 7 ensures Iowa businesses will continue to recover from the pandemic without facing additional costs,” Townsend said. “And like employers, we are working hard to make sure they have the skilled workforce they need to continue their recovery.”

Iowa law requires Iowa Workforce Development to establish a table to determine the unemployment tax rates that will impact eligible employers each year. The unemployment insurance rate table trigger is derived from a formula based primarily on the balance in Iowa’s unemployment insurance trust fund, unemployment benefit history, and covered wage growth. Based on this formula, contribution rates will continue to be drawn from Table 7 (out of eight possible tables) in calendar 2022.

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.

Pennsylvania Unemployment Tax Rates to Hold Steady for 2022

The Pennsylvania Department of Labor & Industry announced that unemployment tax rates for 2022 will be determined with the same schedule used in 2021.

Effective January 1, 2022, total tax rates for experience-rated employers are to range from 1.2905% to 9.9333% and are to include a 0.75% state adjustment factor, a 5.40% solvency surcharge, and a 0.50% additional contributions tax, the department stated on their website.

Unexpectedly, an interest rate factor is not to be in effect for 2022 despite Pennsylvania having an outstanding Title XII loan that, if not repaid in full by November 10, 2022, will result in a FUTA tax increase for PA employers.

For 2022, unchanged from 2021, the total tax rate for new non-construction employers is to be 3.6890%, and the total tax rate for new construction employers is to be 10.2238%. The rates include a 5.40% solvency surcharge.

Employees are to be assessed an unemployment tax rate of 0.06%, unchanged from 2021, with the tax deductible from wages.

Pennsylvania’s unemployment taxable wage base, which is to be $10,000 for 2022, does not apply with regard to unemployment tax assessed on employees.

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.

United States Department of Labor’s Unemployment Claims Report – Week Ending August 21, 2021

The Unemployment Insurance Weekly Claims report for the week ending August 21, 2021 has been released by the United States Department of Labor.

Week Ending 8/21 Prior Week
Seasonally adjusted initial claims: 353,000 348,000
4 week moving average: 366,500 377,750
Seasonally adjusted insured unemployment rate: 2.10% 2.10%
Seasonally adjusted insured unemployment number: 2,862,000 2,820,000
4-week moving average: 2,901,500 2,998,750
Number of unadjusted claims: 297,765 308,574
Unadjusted insured unemployment rate: 2.00% 2.00%
Unadjusted number claiming UI benefits: 2,763,176 2,763,782

The full news release report can be downloaded here.

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.

United States Department of Labor’s Unemployment Claims Report – Week Ending August 14, 2021

The Unemployment Insurance Weekly Claims report for the week ending August 14, 2021 has been released by the United States Department of Labor.

Week Ending 8/14 Prior Week
Seasonally adjusted initial claims: 348,000 375,000
4 week moving average: 377,750 396,250
Seasonally adjusted insured unemployment rate: 2.10% 2.10%
Seasonally adjusted insured unemployment number: 2,820,000 2,866,000
4-week moving average: 2,998,750 3,101,000
Number of unadjusted claims: 308,574 320,517
Unadjusted insured unemployment rate: 2.00% 2.10%
Unadjusted number claiming UI benefits: 2,763,782 2,817,487

The full news release report can be downloaded here.

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 End of Federal Pandemic Benefits

Summer is winding down and with the end of summer comes the end of the Pandemic Emergency Unemployment Assistance (PEUC) for many unemployed Americans. The CARES Act provided a lifeline for unemployed Americans by providing 13 weeks of federally funded PEUC benefits to those who had already exhausted their benefits at the state level, plus an additional 13-20 weeks of federally funded Extended Benefits in states that continued to have high levels on unemployment.  These programs, combined with the regular state unemployment benefits, can provide up to 53 weeks of benefits.

On September 6, 2021, the Federal PEUC benefits (additional $300/week) and the PUA benefits that covered individuals who were not eligible for or had exhausted their regular benefits will expire in the states that have not opted out of the program early.

What Does This Mean for Me as an Employer?

Once the program ends, the burden to continue benefits is on the employee.  As employers, the only actions that you need to take are to report those individuals who refuse an offer of work and some states are asking employers to report individuals who fail to show up for scheduled interviews.   Taking these steps will aid the state unemployment agencies in making sure that only those that are eligible still receive benefits.

One area to watch is fraudulent claims. There is concern that once the Pandemic Unemployment Assistance program ends, we may see another spike in fraud claims as cybercriminals shift their focus from the benefits paid to gig workers (PUA) to the traditional unemployment programs.  According to a recent report by Bloomberg Law “Fraud rings look for easy targets that produce revenue with minimal risk,” said Douglas Holmes, president of UWC – Strategic Services on Unemployment & Workers’ Compensation, an advocacy organization for businesses. “When PUA is no longer on the board, they’ll look to other places to exploit. They’ll look to regular UI.”

Employers should pay close attention to benefit claim notices, report those that are suspicious, and alert workers that they might be victims of identity theft.  Thomas & Company should be alerted to any potential fraud claims so that we can audit the unemployment benefit charge statements to protest any questionable claims. As always, we post the most up to date information on our UI Fraud Support page https://support.thomas-and-company.com/hc/en-us/categories/1500000053821-CLAIMS-FRAUD

How will my employees that are still unemployed be impacted?

You may want to be prepared to answer any questions that come from your employees who are still unemployed.  We have outlined the changes that have taken place, or will be coming, below.

What benefits will end:

  • The Pandemic Unemployment Assistance (PUA) program for those who traditionally did not qualify for regular state benefits, such as self-employed and independent contractors, or exhausted all other benefits
  • Pandemic Emergency Unemployment Compensation Program (PEUC) that extended regular state benefits
  • Federal Pandemic Unemployment Compensation Program (FPUC), which provided an additional $300 weekly benefit payment.

PUA benefits were available for those claimants who:

  • Lost their jobs or self-employment because of the COVID-19 pandemic
  • Did not earn enough wages in the 18 months before they applied for benefits to qualify for a regular unemployment benefits claim
  • Exhausted their regular unemployment, Pandemic Emergency Unemployment Compensation (PEUC) and State Extended Benefits (EB) or did not qualify for these claims

If your employees were receiving PUA and FPUC federal benefits, once the program expires in the state, they will not receive any further pandemic program benefit payments after the expiration date, even if they had a balance remaining on their claim.

If your employee had been receiving PUA benefits, they will still be required to provide proof of employment, self-employment, or prospective employment or self-employment, even though the pandemic claims program has ended. Requests for proof of employment must be provided by the deadline indicated on the notice. This requirement remains in effect even after the PUA program ended. If they fail to provide proof, they may have to repay all PUA benefits they received from December 27, 2020, or from their initial PUA claim date.

States will also begin enforcing the work search requirements to continue benefits.  This provision was waived during the pandemic to limit the spread of COVID-19. Pre-pandemic, the requirements for unemployment were being able and available for work and actively seeking work.  States will require those still receiving benefits to prove that they are actively seeking work by logging or reporting their work search activities, registering with the state’s re-employment services, or taking advantage of other re-employment options available in the state. Failure to report adequate re-employment activities can lead to benefits being denied.

On Thursday, August 19th, Labor and Treasury Department officials announced that states can pay benefits past the September 6th expiration date by using leftover funds allocated to them through the American Rescue Plan. “Now, in states where a more gradual wind down of income support for unemployed workers makes sense based on local economic conditions, American Rescue Plan funds can be activated to cover the cost of providing assistance to unemployed workers beyond Sept. 6,” Treasury Secretary Janet Yellen and Labor Secretary Marty Walsh wrote to Senate Finance Committee Chair Ron Wyden, D-Ore., and House Ways and Means Committee Chair Richard Neal, D-Mass.

Twenty-six states opted out of federal unemployment programs early, in June and July, to try pushing jobless workers back into the labor market. Four states — Alaska, Arizona, Florida, and Ohio — only ended the extra $300 a week and kept other federal benefits intact. And state judges in Indiana, Maryland and Arkansas reversed officials’ withdrawal, reinstating the benefits.

States do not have to meet specific economic conditions to offer unemployment assistance from the leftover funds.  We will continue to monitor the situation as the deadline draws near.  If any additional actions are needed as an employer, we will 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.

United States Department of Labor’s Unemployment Claims Report – Week Ending August 7, 2021

The Unemployment Insurance Weekly Claims report for the week ending August 7, 2021 has been released by the United States Department of Labor.

Week Ending 8/7 Prior Week
Seasonally adjusted initial claims: 375,000 385,000
4 week moving average: 396,250 394,000
Seasonally adjusted insured unemployment rate: 2.10% 2.10%
Seasonally adjusted insured unemployment number: 2,866,000 2,930,000
4-week moving average: 3,101,000 3,188,250
Number of unadjusted claims: 320,517 323,763
Unadjusted insured unemployment rate: 2.10% 2.10%
Unadjusted number claiming UI benefits: 2,817,487 2,880,564

The full news release report can be downloaded here.

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.

New Jersey Unemployment Tax Rates Set to Rise for 2021/2022

The New Jersey Department of Labor & Workforce Development has announced that employers should expect unemployment tax rates to be higher for the one-year period from July 1, 2021 to June 30, 2022.

Effective July 1, 2021, tax rates for experience-rated employers are to be determined with Schedule C and will range from 0.50% to 5.80% (including the 0.1175% Workforce Development/Supplemental Workforce Fund rate).  Tax rates under Schedule C are generally higher than those under Schedule B, which was in effect from July 1, 2020 through June 30, 2021.

The new-employer tax rate will remain at 2.80% during this time.

As a result, New Jersey employers will pay an estimated $250 million to replenish the state’s depleted unemployment insurance trust fund, which was drained during the COVID-19 pandemic. In the past 18 months, New Jersey has paid out nearly $33 billion in benefits through roughly 2.3 million initial unemployment claims.

The state’s initial tax hike in October would be the first of three rate increases that will be rolled out over a three-year period.

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.

 

MANDATORY VACCINATION POLICIES AND ELIGIBILITY FOR UNEMPLOYMENT BENEFITS

Due to the recent nationwide spike in cases associated with the Delta Coronavirus variant, many employers are encouraging their employees to be vaccinated and an increasing number of workplaces are requiring vaccinations to remain employed.  As a result, Thomas & Company has received numerous inquiries regarding how State Workforce Agencies might rule on eligibility for unemployment benefits should an individual voluntarily resign due to this policy or is subject to discharge for refusal to comply with the policy.

In most states, unemployment benefits are paid to individuals who are out of work through no fault of their own.  In general, individuals who are discharged for misconduct, willfully violating company policies, or endangering the safety of the workplace would typically be determined ineligible for benefits.  Likewise, someone who voluntarily quit would need to prove they had “good cause connected to the work and that is attributable to the employer.”

Private employers are typically free to set conditions of employment as long as they do not violate existing state and federal laws.  There are currently 27 states that have legislation pending that would prohibit employers from mandating vaccinations or requiring proof of vaccination as a condition of employment.  If these bills are passed into law, this will have an impact on whether or not an individual is eligible for unemployment benefits if they resign or are discharged based on their vaccination status. For more information on the employer-mandated vaccine legislation, please refer to https://www.huschblackwell.com/newsandinsights/50-state-update-on-pending-legislation-pertaining-to-employer-mandated-vaccinations.

That said, State Workforce Agencies can update eligibility requirements such that, depending on the circumstances, may allow unemployment benefits in either case.  Most state agencies review each unemployment claim on a case-by-case basis and make its determination on eligibility dependent on the individual facts.

This remains an extremely fluid issue and, as always, Thomas & Company 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.

Work Opportunity Tax Credit Transition Relief Issued for Designated Community Residents and Summer Youth Employees

On August 10, 2021 the IRS issued Notice 2021-43, announcing it is providing transitional relief for employers that hired individuals that identify as a Designated Community Resident or Qualified Summer Youth Employee.  This transition relief extends the twenty-eight day deadline for employers to submit a request to a Designated Local Agency to certify that an employee hired between January 1, 2021 and October 8, 2021 is a Designated Community Resident or Qualified Summer Youth Employee and has a principal place of resident within an Empowerment Zone.

Empowerment Zones are distressed areas that have been designated based on specific criteria and benefit from tax incentives, grants, and other forms of government assistance.  The Empowerment Zone designations terminated on December 31, 2020, but the Taxpayer Certainty and Disaster Tax Relief Act of 2020, permitted the designations to be extended through 2025.

Employers must receive, on or before the day on which such individual begins work for the employer, a certification from a Designated Local Agency that such individual is a member of a targeted group or must request certification that the individual is a member of a targeted group by submitting Form 8850 (Pre-Screening Notification and Certification Request for the Work Opportunity Credit) to a Designated Local Agency within twenty-eight days of hiring that individual. The transition relief under this notice allows employers to submit Form 8850 for these employees who identify until November 8, 2021.

This notice also provides guidance to certain employers who submitted a Form 8850 to a Designated Local Agency for these employees during the period of transition relief and received a denial due to the termination of Empowerment Zone designations on December 31, 2020 or who received a certification before the Empowerment Zone designations were extended.

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

 

 

Tennessee Unemployment Tax Rates Hold Steady for 2021/2022

In a phone call today, sources from the Tennessee Department of Labor & Workforce Development indicated that unemployment tax rates for the one-year period from July 1, 2021 to June 30, 2022 will remain at Premium Table 6.

Tax rates in Tennessee have been at Premium Table 6 since July 1, 2015.  This is the lowest table in the Department’s statutes.

Effective July 1, 2021, Tennessee’s experienced-employer unemployment tax rates will range from 0.01% to 10.00%.  The new-employer tax rate will also remain unchanged at 2.70%.

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

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.