‘Tis the season…. For Unemployment Insurance Taxes
Unemployment insurance taxes are adjusted annually across the country. In most of those states that rate is adjusted starting in January, with the exceptions of NJ, VT, and NH which adjust in July. Because unemployment insurance taxes are administered on a state level, each state has its own way of calculating the rates and notification time frame. While some states send out the notices in advance of the effective starting date, many do not which leaves employers scrambling to true-up accruals when the new notices are received. What also makes matters more confusing is that due to UI modernization efforts across the country, many states have moved towards online portals to announce the rate notices instead of mailing them the way they had done in the past. For multi-state employers, it can truly be a nightmare to keep track of and update those rates. Last, but not least, many states give employers the option of making a “voluntary contribution” to lower their rate with various deadlines. Truly a difficult task for employers to manage on their own.
For those employers who have some or all of their tax rate notices, they are also experiencing a wide range of emotions. The last two years have seen unprecedented unemployment charges due to the COVID-19 pandemic, but many employers are not being held responsible for those charges. Many states relieved UI benefit charges during the calculation period, so the rates either are not as high as expected or even dropped from last year. States have depleted their UI reserves to pay those relieved benefit charges, and are now raising mutualized taxes or shifting tax rate columns causing significant tax increases. It’s true, and literally, all over the map.
Using a TPA like Industrial U.I. can help employers better understand, and control, their UI taxes, and ensure they are paying the lowest rate possible.
Industrial U.I. is a nationally recognized leader in the unemployment cost control field. Its clients include hospitals, health care institutions, national retail organizations, staffing agencies, municipalities, school districts, museums, manufacturing companies, and more.
From the inception of an unemployment insurance claim through the entire hearing and appeal process, Industrial U.I. prides itself on providing personal, “white glove” service by its team of experts in the states where its clients do business.
Industrial U.I. delivers expert tax advice to ensure each client’s unemployment insurance tax is kept to a minimum while providing timely and useful reports that can be accessed on our client web portal 24/7. These reports provide useful data to help clients know where their UI dollars are going along with benchmarks and measuring sticks to track progress in all areas of unemployment cost control.