The U.S. Department of Labor recently released their April-June
2016 quarterly report on the status of the Unemployment Insurance (UI) program.
Congress designed the program as a federal-state
partnership. The federal government provides over-arching support to help
ensure conformity and compliance within the framework of federal law. Because
of Utah employer’s compliance with federal law, they experience a 90 percent
credit towards their federal unemployment tax — the difference between paying
$420 per employee to $42 per employee each year.
States are provided with the latitude to adopt their own
laws towards accomplishing the goals of the program, tailored towards their
unique economic and geographic landscapes. This ensures that the voice of local
employers — who fundamentally support the UI program structure — is heard. This
also provides states with the agility to address changes in the dynamics of
local labor markets.
This federal-state partnership results in 53 different
variations of UI being administered across the country; of which, Utah
continues to be a leader.
Thanks to the effective management of our state legislature
and the growing economy, Utah’s trust fund balance is currently the fourth
healthiest in the nation.
Looking back at the most recent recession, Utah was one of
only 15 states that did not have to borrow money to pay for benefits during
that time. In contrast, with the Department of Labor’s most recent quarterly
summary, there are nine states who are still considered insolvent and 26 who
are below what the Department of Labor considers to be “minimally solvent.”
Due to effective management of our fund and in contrast with
many other states, Utah businesses will pay less in taxes in 2016 compared to
the prior year. Additionally, Utah is prepared for the future with a robust
fund. Employer 2017 rates are currently being calculated and will be mailed out
at the beginning of December.
Because employers are hiring Utah’s skilled workforce, we
continue to rank in the top 10 states for lower durations of receiving
unemployment benefits and lower rates of individuals exhausting their full amount
Historically, most states have offered up to 26 weeks of
benefits. Some states have decreased that amount to address solvency issues
with their trust fund. Utah has not changed the current eligibility parameter
and qualified individuals may receive between 10 and 26 weeks of benefits based
on prior wage history. Even with that, only 26 percent of individuals actually
exhaust their full benefit amount in Utah (compared to the national average of
We continue to look for meaningful ways that support that
transition back into employment. We are currently running a few re-employment
pilot programs focused on holding individuals accountable for their work search
and facilitating that connection with employers who are hiring.
In September, Utah was invited to testify before Congress
about innovative approaches to strengthening UI to serve the unemployed today
and in the future. We provided an example of a state that’s “gotten it right.”
In October, Utah was recognized as being the top-performing medium-sized state in the country — across the board — for an unprecedented fifth
year by the Department of Labor. This is the culmination of seven consecutive
years of high performance in determining eligibility for benefits, six
consecutive years in assessing employer liability, and eight of the last nine
years in processing appeal requests. Our staff function with the mantra of
“quality and timeliness” in everything we do.
Utah currently has 77K active employers who have employed
1.3 million individuals with the safety net of unemployment insurance. When
unemployment does happen, we’re here to support the employers and employees of
the Beehive State.