Unemployment insurance tax rate will see another reduction in 2016
December 3, 2015
SALT LAKE CITY — Utah employers will again see a reduction in unemployment insurance tax rates in 2016, due to a strong economy and healthy Unemployment Compensation Fund.
“Utah’s strong job growth and low unemployment rate have fueled a healthy fund, which translates into lower tax rates for employers,” Gov. Gary R. Herbert said. “The reduction is another indicator that Utah’s economy is strong as we enter 2016.”
In 2016, 73 percent of Utah’s established employers will qualify for the minimum contribution rate of 0.2 percent or $64 per employee per year, a nearly one-third decrease in liability from 2015. For the remaining Utah employers, the average reduction expected per employee is 12.7 percent. This is due to a decrease in the amount of benefits being claimed and an increase in Utah’s taxable wage base from $31,300 to $32,200 over the past year. Contribution rates for experienced employers will range from 0.2 percent to 7.2 percent. New employers will pay an industry average, ranging from 1.2 percent to 7.2 percent.
“The unemployment program is designed to build up the fund when we have a strong economy, serving as an economic stabilizer to preserve our skilled workforce during slower times,” said Jon Pierpont, executive director of the Utah Department of Workforce Services. “The best way to control unemployment costs is to reemploy Utah’s skilled workforce. Our employment counselors are ready to serve Utahns in need of work.”
Employers contribute to the Utah Unemployment Compensation Fund to pay benefits to workers who become unemployed through no fault of their own. At the end of the last fiscal year, the fund had a balance of $881 million — well within the statutorily desired level. This is also a significant improvement from the balance of $253 million just a few years ago.
Workforce Services paid record amounts of benefits during the Great Recession, and it has taken several years of strong economic growth to replenish the fund. Workforce Services will continue to monitor the fund and recommend appropriate changes to Governor Herbert as warranted.
For information about the tools Workforce Services has available to help jobseekers find employment, visit jobs.utah.gov or a local employment center. In addition, employers can post a job, find qualified works and learn about controlling their unemployment costs on jobs.utah.gov.
About Unemployment Insurance Division
Utah’s Unemployment Insurance Division provides economic stability to Utah’s workforce, families and communities. Unemployed Utahns are invited to work with Utah’s team of specialists to determine what benefits they may qualify for. Contributions collected from Utah employers, under the state unemployment tax, are used exclusively to pay benefits to unemployed workers who are able and available to seek and accept full-time work. For more information about Utah’s Unemployment Insurance Division, visit jobs.utah.gov/department/ui.html.