07/31/2007
The state Labor Department reports the average unemployment compensation tax rate beginning Jan. 1, 2008, will be 4.7 percent -- down from 5 percent in 2007 and 5.4 percent in 2006. The change should save employers about $141 million.
An automatic mechanism to maintain the solvency of the fund from which unemployment compensation benefits are paid was enacted as part of a series of reforms in 1998 to the state unemployment compensation law. This mechanism triggered a combination of employer/employee tax increases and benefit reductions following the 2001 recession.
Based on the level of the trust fund on June 30, the average annual benefit payments for the past three fiscal years and economic forecasts for the coming year, the average tax rate for employers for 2008 is projected to be 4.7 percent on the first $8,000 of wages. The average employer cost for unemployment compensation per employee is projected to drop by $28.
