The Indiana General Assembly recently passed unemployment insurance legislation that will have an immediate impact on the premium rate for your state unemployment taxes. There are two parts to this new legislation: good news and bad news!
First the bad news. This new law creates a surcharge to the employer to help pay the interest due on the loan from the federal government. For 2011, this surcharge is 13% of your premium. Most likely you received a “Notice of Premium Modification” from the Indiana Department of Workforce Development. In this letter, you will see the interest surcharge multiplier of 1.13. This is the 13% surcharge to help pay the interest on the federal note.
Now for the good news! The premium rates are reduced from the initial calculation sent earlier in the year. This new law moves the premium rate from Schedule B to Schedule E through the year 2020. The net impact to you, the employer, is a lower premium rate.
In summary, this new law is employer friendly. The federal debt is being amortized over a longer period of time resulting in a net decrease to the employer’s unemployment taxes.
You don’t have to face your state unemployment taxes alone. We have had many successful engagements with clients that resulted in a reduction of their state unemployment taxes. We have also provided guidance on the steps necessary to minimize these costs moving forward.
