Senate committee votes to cap employer unemployment taxes for 2011
Monday, January 31 2011 - The Hopper | Permalink
The Senate Labor, Commerce & Consumer Protection Committee voted this morning to temporarily cap the social cost portion of employers' unemployment taxes for this year.
If the bill passes the Legislature by February 8, 90 percent of employers around the state would see a tax cut this year, totaling roughly $300 million in tax relief.
This tax break would come at a time when unemployment insurance (UI) tax rates are set to increase by an average of 36 percent. In the latter part of 2008 and 2009, the state paid out significantly more in benefits than it collected in taxes. This caused a dramatic increase in the tax rates in 2010, and if changes are not made this year to how the social tax is calculated, there will be a dramatic increase in 2011 and 2012 as well.
Senate Bill 5135, legislation requested by Gov. Chris Gregoire, is likely to be the first of multiple bills being considered by the Legislature this year on UI reform. Future issues likely to be considered include, increasing benefits for unemployed workers, making Washington eligible for more federal funds as well as making the temporary tax cut permanent.
http://blog.senatedemocrats.wa.gov/the-hopper/senate-committee-votes-to-cap-employer-unemployment-taxes-for-2011/2011 House Bill 1091 (Modifying the unemployment insurance program)
•Introduced by Rep. Mike Sells, (D-Everett) (D) on January 11, 2011, makes permanent changes to the unemployment insurance program. This act modifies training benefits for unemployed workers giving priority to those who made/make claims for benefits between April 5, 2009, and January 15, 2012, subject to available funding. This act also sets new limits on the amount of social tax contributions to be made by employers beginning with rate year 2011. The portion of this act related to job training benefits takes effect January 15, 2012, unless the federal government determines it does not meet requirements for federal unemployment assistance. The portion of this act related to social tax contributions by employers takes effect immediately.
◦Referred to the House Labor & Workforce Development on January 11, 2011.
■Substitute offered in the House on January 25, 2011, to remove sections related to training benefits and add sections related to extended benefits and dependents' allowances. The substitute failed by voice vote in the House on January 25, 2011.
◦Referred to the House Rules Committee on January 26, 2011.
■Amendment offered by Rep. Mike Sells, (D-Everett) (D) on February 9, 2011, provides a temporary increase to the unemployment benefit, as extends the benefit period. The striker admentment also makes a permanent fix to how unemployment rates are calculated. This change lowers the tax burden of businesses under the state UI program. The amendment passed by voice vote in the House on February 9, 2011.
■Amendment offered by Rep. Mike Sells, (D-Everett) (D) on February 9, 2011, removes intent language found in the underlying striker. This amendment also clarifies which benefits are eligible for the temporary increaes and caps the annual temporary increase at $68 million, instead of $90 million . The amendment passed by voice vote in the House on February 9, 2011.
•Passed 98 to 0 in the House on February 9, 2011, to establish caps on the flat social rate and reduces the multipliers used for certain graduated social rates. Provides for a temporary benefit increase by adding $25 to the weekly benefit amount Makes changes to training benefits, including expanding the definition of "dislocated worker," eliminating certain deadlines and requirements for dislocated workers, and modifying the funding cap for training benefits.
http://www.washingtonvotes.org/2011-HB-1091
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