Iowa Unemployment Taxable Wage Base to Rise in 2019

The Iowa Department of Workforce Development announced today that the unemployment taxable wage base is set to rise to $30,600 in 2019, up from $29,900 in 2018.

The change to the taxable wage base takes effect Jan. 1, 2019.

The Department’s unemployment tax rates for 2019 are expected to be finalized in December.

As always, if there are any questions please do not hesitate to contact us.

Vermont: Lowered UI Taxes

Unemployment insurance taxes in the state of Vermont are being reduced for the second year in a row. The state was moved into a Tax Rate Schedule 4 in the summer of last year and this year is moving into a Schedule 3. The highest rates will be lowered to 6.5 percent and the lowest rates will go down to 0.8 percent.

The current maximum weekly benefit amount of $466 will also be increasing to $498. Additionally, the move to a Schedule 3 reduces the taxable wage base in the state by $2,000 in the new year.

FIRST LOOK: Unemployment Tax Rates in 2019

It is hard to believe that we are approaching the end of the second quarter of 2018 and soon employers will receive unemployment tax rates for 2019.  Each year, the unemployment agencies calculate tax rates based on employers’ prior experience.  Experience is made up of multiple factors; taxable payroll, taxes paid, benefit payments for claims lost and reserve balance, to name a few.  While most states mail tax rates starting in November of any given year, a handful of states do so on a different time frame.

Fiscal Year States

Four states (New Hampshire, New Jersey, Tennessee, and Vermont) mail tax rates in the middle of a calendar year and are effective from July 1 through June 30.  These are referred to as being Fiscal Year states, meaning their tax rates are in effect during what is typically called a fiscal year as opposed to a calendar year.  Of these four states, only New Jersey offers employers the option to buy down rates for the upcoming year.  There are very strict deadlines for protesting or in the case of New Jersey, making the voluntary contribution so once past, the opportunity is missed.  Your dedicated UI Tax Analyst is skilled in the verification of tax rates on your behalf and will make certain you are made aware of all possible tax reductions.

California Pays its Title XII Loan

In May, California paid off its Title XII Loan for the first time in over a decade.  If the state retains its zero balance until November 10, 2018, the state’s employers should see a return to the minimum Federal Unemployment Insurance Act or FUTA rate of 0.60%.  At this time, estimates indicate California will be successful in this endeavor so employers should see their FUTA taxes return to the minimum allowed for the calendar year.  Currently, no other states have a Title XII loan.

As always, if there are any questions please do not hesitate to contact us.

Massachusetts Increases Hourly Minimum Wage

The Massachusetts Legislature passed House Bill 4640 to provide paid leave and raise the state’s hourly minimum wage on May 20, 2018. HB 4640 has now been sent to Gov. Charlie Baker (R) to sign or veto.

Under the measure, HB 4640 would raise the state’s hourly minimum wage to $15 by 2023 from the current $11. The measure also would phase out the rule that employees who work on Sunday must be paid time and one-half.

In addition, Massachusetts workers could take up to 12 weeks of paid leave to care for sick family members or a new baby and up to 20 weeks of paid leave to tend to one’s own medical needs.

As always, if there are any questions please do not hesitate to contact us or visit our website.

Vermont New-Employer Unemployment Tax Rates to Decrease

The Vermont Department of Labor released information on June 19, 2018 indicating that unemployment tax rates for new employers in the construction industry are set to decrease effective July 1, 2018.

The general unemployment tax rate for new employers is to remain 1 percent, but new employers in construction industries recognized with codes 236, 237, or 238 in the North American Industry Classification System currently receive higher rates.

The new-employer tax rate for the buildings construction industry (code 236) is to be 4.6 percent, down from 4.8 percent; the new-employer tax rate in the heavy- and civil-engineering construction industry (code 237) is to be 6.1 percent, down from 6.4 percent; and the new-employer tax rate in the special-trade contracting industry (code 238) is to be 5.5 percent, down from 5.8 percent.

Effective July 1, 2018, Vermont’s experienced-employer unemployment tax rates are to be determined with Schedule 3 and are to range from 0.8 percent to 6.5 percent.

The range of rates to take effect July 1 has a lower maximum and minimum than the Schedule 4 range of 1.1 percent to 7.7 percent, which has been in effect since July 1, 2017. Vermont 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.

MAINE: Next Phase of UI Progam

ReEmployMe, a program introduced last December, has been met with a bit of opposition in the state of Maine. The purpose of the online program is for claimants’ easy access to benefits. 

The next phase of the program, which will be geared toward employers, is set to roll out in August with implementation in November. Concerns have been expressed over this, as many feel the first phase rollout was too rushed, with many claimants unable to access their benefits for an extended amount of time. Reports of Mainers getting locked out of their accounts as well as controversy surrounding false claims that the labor department maintained the system in working order has people on edge.  

The Labor Department has responded to accusations stating that new systems are expected to have some difficulty with a portion of the claimant community and that filing online is not their only option. Should they have trouble with the online system, they can always go to a career center for assistance. They listed phone numbers for the Work Search and Technical Support line along with their hours as additional resources.


Kentucky Enacts Service Capacity Upgrade Fund for Third Quarter 2018

During the 2018 Legislation Session, the Kentucky Legislature General Assembly enacted the Service Capacity Upgrade Fund (SCUF), through HB 487, Section 139. Per KRS 341.243, all contribution rates beginning with the 3rd quarter of 2018 shall be reduced by 0.075%, in order to implement SCUF. There is no increase or decrease in the total amount of tax employers will pay. Instead, this reduction will divert 0.075% of the contributions that would have been applied to your employer reserve account, and apply to SCUF. In addition, you will not be able to claim SCUF payments on your Federal Unemployment Tax filings. Below is an example of how your 2018 reporting periods will change:

Kentucky Reporting Period Changes

Each year SCUF is in effect, all contribution rates will be reduced by 0.075%. SCUF is estimated to be in effect for the next 5 years or until the trust fund reaches $60 million.

If you are an employer who files using Option 1 or Option 3, you will need to update your ICESA ‘T’ Record Format for Field positions 145-149 and 150-160. You are an employer who files using Option 2 (Online Form Entry), the rates and adjustments have already been made and require no changes on your part.

Following is a 2018 Contribution Rate Schedule (Schedule B) to illustrate the rate breakdown once SCUF takes effect:

Kentucky Contribution Rate Schedule

As always, if there are any questions please do not hesitate to contact us.



Alaska: Extended Benefits Nearing End

The Department of Labor & Workforce Development in the state of Alaska has announced an update to extended Unemployment Insurance Benefits. Extended benefits began for eligible participants on November 5, 2017. The last payable week of these benefits will be April 7, 2018.

The reason for the termination of these extended benefits is due to the state’s unemployment rate, which is not currently meeting the eligibility requirements. Those affected by this announcement will be notified with a mailed statement from the state’s Unemployment Insurance Program.

Alaskans with a balance of extended benefits can keep filing until the benefits have been exhausted (or the April 7tth date, whichever is first). Those who have already exhausted their regular benefits are able to file a new claim for extended benefits through the end of the April 7th week of 2018.

The following Unemployment Insurance Claim Centers are available to address any questions you may have on this matter:

(907) 269-4700

(907) 451-2871

(907) 465-5552

All other areas
(888) 252-2557

Alaska: Elimination of Minimum Wage Exemption

Alaska’s Department of Labor & Workforce Development has announced the elimination of subminimum wages for employees with disabilities. Paying the disabled under minimum wage has been permitted in the state of Alaska since 1978, but as of last Friday, it is no longer allowed. The state follows New Hampshire and Maryland’s lead in eliminating this minimum wage exemption. The belief that lower wages help those with disabilities gain employment no longer holds true with the past two decades showing success in their jobs with higher pay. The Department of Labor and Workforce Development exclaims this portion of the workforce “deserves minimum wage as much as any other Alaskan worker.”