As if small business owners in Connecticut haven’t already had enough of state government taking money out of their pockets with increased and retroactive income taxes taking effect on August 1st, now they are facing a special assessment for unemployment compensation that will cost on average, an estimated $35 per employee. Recently the Connecticut Department of Labor (DOL) began sending out special assessment bills to employers, and payments will be due back to the DOL by August 31st. The special assessment is needed to fund required interested payments to the federal government due to borrowing by the state to make up for an insolvent unemployment compensation fund.
In Connecticut, unemployment compensation insurance fund payouts have exceeded revenues since 2007, causing the fund to become insolvent in late 2009. To help make up for the shortfall, the state DOL began borrowing from the United States Department of Labor to the tune of over $800 million, which could eventually approach $1 billion in the coming years. While the interest on this borrowing was initially waived, employers are required to pay back this interest through special assessments administered by the state.
For more information, small business owners can contact the state DOL, which has posted information and updates on their website at www.ct.gov/dol under "Unemployment Taxes".