Big Increases in Unemployment Taxes Expected Next Year

According to the Employment Security Department employer taxes are projected to rise up to 38 percent for 2011. The department notes that the rates may decline in 2012 and it is researching ways to spread this increase out over a number of years with the goal of reducing the 2011 increase. Included in this analysis the department is considering raising tax rates on employers in the highest rate classes (many construction employers are in these rate classes). The argument the department is making is that these employers do not have to pay their true experience because of the statutory tax cap.

At the same time the department is determined to push for a benefit increase in 2011 in order to qualify for a one-time federal infusion of $98 million a cash bonus states could get but only if they agree to permanent benefit increases. The agency would need a change in state law to either expand benefits for part-time workers or change the requirements for claimants in training. These changes would need to be made in the upcoming 2011 legislative session.

This is not good news for the business community specifically construction and AGC will work to minimize increases.