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By June 16, 2016Blog

The U.S. Department of Labor has released its annual Significant Measures of State UI Tax Systems Report reviewing state unemployment insurance financing for 2015. 

On average UI taxable employers paid $370 per employee in state UI taxes. Other important points from the report include:

  • Thirty-seven percent of taxable employers paid the lowest tax rate in state rate schedules, (four states had a 0% tax rate assigned to those employers).
  • Seven percent of taxable employers were assigned the highest tax rate.
  • On average the state average tax rate was 23% below the DOL recommended state Minimum Adequate Financing Rate.
  • Six percent of the total benefits paid were made to claimants that were laid off from firms that went out of business.
  • Eight percent of total benefits were paid to claimants who were laid off from a non-taxed reimbursable employer (Federal, state, or local government, or non-profit organization).

States with the highest average per covered employee cost (not including alternative financing debt service or FUTA tax payments) included:

Rhode Island                        $714
New Jersey                           $709
Oregon                                  $696
Vermont                               $637
Pennsylvania                       $627
Connecticut                         $609
New Mexico                         $522

States with the lowest average per covered employee cost:

South Dakota                      $115
Nebraska                              $130
Tennessee                            $133
Mississippi                           $151
New Hampshire                  $151
Louisiana                              $155
Oklahoma                            $159

States with average tax rates most above the level recommended by US DOL for adequate financing included:

Wyoming                              63.1%
Oregon                                  25.8%
Utah                                       20.1%
Oklahoma                             19.8%
Alaska                                      9.8%
Montana                                 7.2%
Virginia                                   3.4%

States with average tax rates most below the level recommended by US DOL for adequate financing included:

Virgin Islands                     -72.2%
Indiana                                 -57.1%
New Hampshire                 -57.0%
Tennessee                            -55.4%
South Carolina                   -49.6%
Ohio                                      -49.5%
California                             -47.7%

The US DOL guidelines assist with comparison of states, although individual state financing can vary significantly and still be sufficient to assure that funds are available to make unemployment compensation payments when due.

Hat Tip: Strategic Services on Unemployment & Workers’ Compensation

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