Unemployment Tax Hike in 2014
Ohio Employers Face another Unemployment Tax Hike in 2014 and a Potential 60% increase by 2016…
Besides the rash of unemployment program and claims management changes for 2014, Ohio and many states across the country are facing increased unemployment taxes and new penalties.
These unemployment tax increases are the direct result of the states’ efforts to pay off loans from the federal government they have accumulated over the last few years. According to a recent article in the Columbus Dispatch (published Jan. 2, 2014,) the federal employment tax paid by employers was increased again for the third time under an automatic repayment system for states that have failed to repay their debts. This increase will cost employers an additional $63 per employee this year, according to the Ohio Department of Job and Family Services.
The article also points out, according to the U.S. Department of Labor, Ohio is among 15 states that owe a combined $20.5 billion. Ohio’s $1.55 billion debt is only surpassed by three other states — California, New York and North Carolina. State officials have not projected when the debt will be repaid, and employers can expect their Federal and State Unemployment Tax burden to continue to be increased.
The President’s 2014 Budget once again includes Federal Unemployment Tax (FUTA) increases and forced state unemployment tax base increases as part of the new tax revenue to be generated. Besides the FUTA increases, the taxable wage base which has been at $7,000 would be increased to $15,000 in 2016. Any state with a taxable wage base below $15,000, including Ohio, Indiana and Kentucky (which each have bases around $9,000,) will have to increase their taxable wage base to the $15,000 amount as well. That’s over a 60 percent increase in cost.
“Employers will wake up one day and look at this cost become a $150 or $200 per employee expense and say: ‘Geez, what’s going on?’ Any time you increase your cost per employee, it means you can’t use the money to employ another position or do something else you want to do to grow your business,” stated Andrew Doehrel, president of the Ohio Chamber of Commerce in the Columbus Dispatch article.
If you have any questions about this information or about how Matrix Unemployment can help reduce your unemployment costs, please contact Ken Kruse at 513.351.1222 or by email email@example.com.