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 and on average will represent an 18% tax increase per employee earning the full wage base.
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.
