DWS Press Release
December 4, 2014
Utah Businesses to Pay Less in Unemployment Insurance Taxes
Growing economy, strong trust fund yield lower rates
SALT LAKE CITY--Most Utah employers will soon enjoy a reduction in unemployment insurance tax rates, thanks to a strong economy and vibrant unemployment compensation fund.
Businesses will pay roughly 13.2 percent less in unemployment insurance contributions (commonly called taxes) in 2015, caused by the increase in Utah’s taxable wage base from $30,800 to $31,300 over the past year. Contribution rates for experienced employers will range from 0.3 percent to 7.3 percent. New employers will pay an industry average, ranging from 1.3 percent to 7.3 percent.
"A healthy fund coupled with a low unemployment rate translates into lower and less volatile employer tax rates," said Bill Starks, director of the Utah Unemployment Insurance Division, which is part of the Department of Workforce Services.
"Utah's contribution rate formulas are designed to build the fund up when we have a strong economy to pay increased benefits when the economy slows. Like auto insurance rates that vary dependent on a driver’s safety record, employers that have stable workforces and fewer layoffs have lower rates."
Employers pay unemployment insurance taxes into the Utah Unemployment Compensation Fund to pay benefits to workers who become unemployed through no fault of their own. The fund currently has more than $837 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.
Utah was one of only 15 states that did not borrow funds to keep paying benefits during the last four years. Ten states still have outstanding loan balances totaling more than $13 million. Workforce Services will continue to monitor the fund and recommend appropriate changes to Governor Herbert as warranted.
###