Texas Unemployment Insurance Rate Cut Should Save Employers $270M
A state agency said it cut the unemployment-insurance tax rate, which will save Texas employers $270 million next year.
The rate cut was due to low recent jobless rates and the Legislature’s decision to eliminate a special assessment that was part of the unemployment-insurance tax.
The Texas Workforce Commission said it lowered the minimum rate to 0.22 percent from 0.29 percent of the first $9,000 of each employee’s wages.
An employer paying the minimum rate will pay $19.80 per employee in 2008, down from $26.10 this year. About 62 percent of Texas employers pay the minimum rate.
The maximum rate will also fall, to 6.22 percent from 7.7 percent. The commission said 3 percent of employers pay the top rate.
The commission said the average unemployment-insurance tax rate would decline to 0.98 percent from 1.3 percent paid this year.
The tax rate employers pay is based partly on claims against an employer’s account for layoffs within the past three years.
The commission said that low jobless rates have led to a surplus in the trust fund used to pay unemployment benefits for workers who lose their jobs through no fault of their own. Also, the Legislature ended an obligation assessment that was part of the tax.
The Legislature passed a measure this year letting the commission pay off bonds issued in 2003 to shore up the trust fund. The state plans to pay off the bonds early, saving employers $270 million next year.