Category

Regional

Massachusetts Revises 2021 Unemployment Tax Rates

The Massachusetts Department of Unemployment Assistance (“DUA”) has released revised 2021 unemployment tax rates for all employers.  In a letter to employers, the DUA announced that these revisions would be available on their website as of today and will reflect a decrease in the solvency assessment, which was a major factor in the original tax rate increases felt by employers in 2021.

Unemployment tax rates have been adjusted due to a decrease in the solvency assessment from 9.23% to 1.12% for 2021.  However, employers will now be assessed a new Covid-19 Recovery Assessment rate, which equals 10.50% of an employer’s unemployment tax rate and ranges from 0.099% to 1.509%.

The adjusted tax rates and recovery assessment rates are retroactive to January 1, 2021.

Unemployment tax payments for the first and second quarters of 2021 have been extended and are due by 3 p.m. Eastern time August 31, 2021.

The letter to employers included tax rate calculation examples and a set of frequently asked questions about adjusted tax rates and the recovery assessment.

This is exciting news for most Massachusetts employers, despite the late notice of these tax rate revisions and the addition of the COVID-19 Recovery Assessment Rate.  Nevertheless, for those employers who receive a lower tax rate for 2021 because of these revisions, they will see an overall tax decrease for calendar year 2021 as opposed to what was budgeted under the originally assigned rate.

Because the DUA is not mailing these revised notices to employers of their third-party agents, we are in the process of retrieving these from the DUA website and verifying the calculations.  We will send them out to our clients once that process is complete.

If there are any questions please do not hesitate to contact us or visit our website for the latest news and updates.

Oklahoma to Resume Charging Employers for Unemployment Benefits

During the COVID-19 pandemic, Oklahoma waived benefit charges for experience rated employers. This waiver expired June 30, 2021.  What does this mean for OK employers? Any eligible claim for unemployment benefits with an effective date after July 3, 2021 will result in a benefit wage charge at the 5th compensable week of unemployment.

The Oklahoma Employment Security Commission recently notified all Oklahoma employers that they were returning to pre-pandemic unemployment benefits and eligibility.  In addition to the eligibility requirements, Oklahoma experience rated employers will also start being charged for benefits for any claim filed after July 3, 2021. You do not need to take any actions. Thomas & Company will continue to monitor your claims and charge activity and take any actions necessary to protest any charges that are associated to your account prior to the waiver expiration.

The notice from OESC reads:

“On May 17, 2021, OESC announced the start of a Back to Work Initiative to address the labor shortage in Oklahoma as a result of the pandemic. Also included in this announcement was a return to pre-pandemic unemployment insurance benefits and eligibility, which was effective June 27, 2021. OESC wants to ensure that state employers are also aware that this change will impact the waiver of benefit wage charges for experience-rated employers with the expiration of the waiver on June 30, 2021, and the renewal of these charges.

End Date for Benefit Wage Charge Waiver

Any eligible claim for unemployment benefits with an effective date after July 3, 2021, (the last day in the week that includes the June 30 expiration date) will result in a benefit wage charge at the 5th compensable week of unemployment.

What are benefit wage charges?

If a claimant is allowed benefits based on the reason for separation from the most recent employment at the time an initial claim was filed, and a valid benefit year is established, a notice is mailed to each base period employer showing the amount of base period wages being charged. This form is titled “Notice of Benefit Wages” and is issued when benefits are paid to a claimant for the fifth week of unemployment in the benefit year. Benefit wage charges are the taxable base period wages reported by the employer to OESC that are used to determine a claimant’s eligibility to receive benefits. Benefit wage charges to an employer account are used in computing the employer’s annual contribution rate.

Which employers receive benefit wage charges?

The separating employer is the most recent employer for a claimant and is the source of the separation that triggers the claimant’s eligibility for unemployment benefits. The separating employer may receive benefit wage charges. Any other employers with taxable wages within the base period also receive benefit wage charges for wages within the base period.

Can benefit wage charges be protested?

Yes, employer protests can be submitted in response to each Notice of Benefit Wages letter an employer receives. The protest must be in writing and must give the basis of the protest and the circumstances of the claimant’s last separation from employment. Acceptable reasons for protest are included in the FAQ’s referenced below.

Find more information and FAQ’s on the Employers tab at the Oklahoma 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 for the latest news and updates.

 

Connecticut Adjusts Unemployment Taxable Wage Base Calculation

Legislation signed by Governor Ned Lamont on July 12, 2021 states that Connecticut’s unemployment taxable wage base is set to increase in 2024 and will be adjusted annually starting in 2025.

Under the measure (H.B. 6633), effective January 1, 2024, the taxable wage base is to increase to $25,000.  This is an increase from $15,000, the taxable wage base in Connecticut since 1999.  Effective starting with the wage base determined for 2025, the wage base is to be indexed to average wages for inflation purposes.

The measure also temporarily changes the look back period used to calculate employers’ unemployment experience ratings.

The experience period generally consists of payroll and unemployment benefit charge data from the three consecutive years ending June 30 preceding the computation date.  However, the experience rating period is to be one year for unemployment tax rate calculations for 2026, and two years for 2027.

Additionally, effective January 1, 2024, employers are not to be charged for unemployment benefits claimed through the state’s shared work program during periods of high unemployment.

The measure also caps the fund-solvency tax at 1.00% starting in 2024, down from 1.40%.  The maximum fund-solvency surtax would be 0.50% in a period of economic recession.

Although there are several components of this measure that would appear to be favorable to employers and ultimately lower their tax rates in future years, the increase in taxable wage base will prove to either neutralize those benefits or exceed them altogether; thus resulting in higher overall unemployment tax payments.

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.

Indiana To Waive Unemployment Benefit Charges for 2022 Tax Rates

The Indiana Department of Workforce Development has confirmed that it will not include unemployment benefits charged from March 13, 2020 to June 30, 2021 when calculating employer’s unemployment tax rates for 2022.

However, this does not necessarily equate into lower tax rates in 2022 and beyond.  The frequently asked questions posted to the IN DWD website indicate that unemployment benefits charges waived from individual employer accounts in 2020 may be recovered through a mutualized unemployment tax for 2022.  Similarly, charges waived in 2021 may be recovered through a mutualized unemployment tax for 2023.

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 Hampshire Unemployment Tax Rates To Hold Steady for Third Quarter 2021

The New Hampshire Employment Security Department announced that unemployment tax rates will remain steady for the third quarter of 2021.

For the one-year period from July 1, 2021 to June 30, 2021, tax rates for positive-rated employers range from 0.10% to 2.70% and rates for negative-rated employers range from 4.30% to 8.50%.  The tax rate for new employers is 2.70%.

A solvency-threshold tax rate reduction, which generally may be applied to the tax rates of positive-rated employers and new employers, is not in effect for the third quarter of 2021.  A surcharge of 1.50% is included in tax rates for negative-rated employers.

New Hampshire’s unemployment taxable wage base is $14,000 in 2021.

The Department has included all of this information on its 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 for the latest news and updates.

Wisconsin Unemployment Tax Rates To Hold Steady for 2022 & 2023

The Wisconsin Department of Workforce Development announced that unemployment tax rates for 2022 & 2023 will be determined with the same schedule used in 2021 under a measure signed July 8, 2021 by Governor Tony Evers.

Under H.B. 406, unemployment tax rates will be determined with Schedule D for calendar years 2022 & 2023; the same schedule used to compute 2021 tax rates.

For experience-rated employers with taxable payrolls of less than $500,000, tax rates determined with Schedule D range from 0.00% to 12.00%.  For experience-rated employers with taxable payrolls of more than $500,000, rates range from 0.05% to 12.00%.  These rates include solvency surcharges.

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.

 

Vermont Unemployment Tax Rates Set to Rise for 2021/2022

The Vermont Department of Labor 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 3 and will range from 0.80% to 6.50%.  Tax rates under Schedule 3 are generally higher than those under Schedule 1, which was in effect from July 1, 2020 through June 30, 2021.

The new-employer tax rate for non-construction industry employers will remain at 1.00% during this time.  For new employers in the construction industry, tax rates are set to decrease.  The new-employer tax rate for the buildings construction industry (Code 236) is to be 3.20%, down from 3.50%; the new-employer tax rate in the heavy and civil engineering construction industry (Code 237) is to be 4.70%, down from 4.90%; and the new-employer tax rate in the special trade construction  industry (Code 238) is to be 3.80%, down from 4.20%.

Additionally, the maximum weekly unemployment benefit amount is set at $583, up from $531, effective week ending July 10, 2021.

This information was reported in a news release issued July 1st.

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.

Texas Finalizes 2021 Unemployment Tax Rates

The Texas Workforce Commission has finally set employer’s tax rates for 2021 and the range of rates remains the same as 2020, 0.31% to 6.31%.

Despite having the same range of rates, 2021 tax rates are slightly less favorable due to an increase in several of the components used to calculate the final rate:

  • The Replenishment Ratio has increased from 1.32 to 1.36
  • The Interest Tax Rate has increased from 0.00% to 0.03%
  • The Unemployment Obligation Assessment Rate has increased from 0.00% to 0.03%
  • The Replenishment Tax Rate has increased from 0.18% to 0.21%

The taxable wage base remains at $9,000 for 2021 as originally reported.

The TWC has stated that all notices of 2021 rates will be mailed no later than July 2, 2021.  We will verify these tax rate calculations upon receipt and forward them to you as quickly as possible so that you can make any rate adjustments for your second quarter 2021 payment.

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.

Tennessee Unemployment Tax Rate Calculations to Exclude All Benefit Charges

The Tennessee Department of Labor & Workforce Development announced that unemployment tax rate calculations for the one-year period July 1, 2021 through June 30, 2022 are to exclude all unemployment benefits claimed during the COVID-19 pandemic in a measure signed by Governor Bill Lee.

Under the measure (SB 2520), unemployment benefits paid from March 14, 2021 through July 3, 2021 will not be charged to employers’ accounts for the purposes of computing the 2021-2022 state unemployment tax rate.  This is an extension of previous laws and executive orders which in total now exclude charges beginning March 15, 2020 running through July 3, 2021.

The purpose of SB 2520 is to curb a sharp increase in tax rates for the one-year period July 1, 2021 through June 30, 2022 and future years, thus allowing Tennessee employers an opportunity to reinvest in their businesses after the COVID-19 pandemic.

No action is required by employers at this time.  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.

Texas Unemployment Tax Rates Hold Steady for 2021

The Texas Workforce Commission announced that unemployment tax rates for 2021 will remain at pre-pandemic levels in accordance with legislative authority enacted.

As you may recall, the TWC announced in March 2021 that 2021 unemployment tax rates would be delayed while they coordinate with the Texas Legislature and the Governor’s Office to explore opportunities to keep tax rates as low as possible following the historic unemployment claims volume seen in 2020.  Our prior post relating to the March announcement can be found here.

Based on this week’s announcement from the TWC, Texas employers can expect to see lower tax rates than expected when the 2021 rates are finally released later this month.  They confirmed that the three adjustment factors included in the overall rate will remain unchanged for 2021:

  • UI Replenishment Rate = 0.18%
  • Deficit Tax Rate = 0.00%
  • Obligation Assessment = 0.03%

The purpose of holding the tax rate low is to curb a sharp increase in tax rates for 2021 and future years, thus allowing Texas employers an opportunity to reinvest in their businesses after the COVID-19 pandemic.

Here are a few quotes from TWC leadership as to why this decision was made:

“Texas employers continue to overcome the challenges of the past year and contribute to a strengthening economy.  Today’s action on UI taxes enables businesses to better focus resources on innovating and expanding jobs available to Texas workers.” – TWC Chairman Bryan Daniel

“Texas workers are eager to get back to work and help move our economy forward.  This decision to keep taxes low will encourage hiring and expand opportunities for working Texans.” – TWC Commissioner Representing Labor Julian Alvarez

“This decision gives stability and predictability to our UI tax structure.  Texas employers and Business leaders look forward to that stability especially after a year of rampant uncertainty.  This gives them the capacity they need to hire, expand and get Texas’ economy back on track.” – TWC Commissioner Representing Employers Aaron Demerson

No action is required by employers at this time.  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.