If applications for unemployment benefits are any indication of economic health, Maryland is on the mend.
Thanks to fewer layoffs and jobless residents, businesses in the state will pay the lowest rates possible under state law for unemployment insurance taxes next year.
Current rates ranging from 0.6 percent to 9 percent will drop to a range of 0.3 percent to 7.5 percent on the first $8,500 each employee earns. An employer’s tax rate depends on turnover and how many employees have filed unemployment claims in recent years.
For employers who pay at the lowest rate—approximately half of all businesses do—that amounts to $25.50 per employee, or half of what they paid in 2015.
Small savings at first glance, but the numbers indicate a positive job-growth trend.
Maryland’s Unemployment Insurance Trust Fund has seen more than a $125-million growth since January, according to Gov. Larry Hogan. It now sits at a comfortable $983.7 million, which prompted the plummeting tax rates.
This is a welcomed change from 2010, when Maryland had to take out $133 million in federal loans to cover jobless benefits. For three years, unemployment insurance tax rates skyrocketed to the highest rates allowable—2.2 percent to 13.5 percent. 2016 will be the second time since 2014 that the rates are at their lowest.
“As a small-business owner, any savings is good,” State Director Mike O’Halloran told the Baltimore Sun. “They can put that toward their business, and they get to spend the money how they want.”
