State unemployment insurance tax is cut 54%

Yellowhammer News ^ | 1/6/2023 | Austen Shipley

[Tell It Right]

Recently, the department announced most employers in Alabama will receive a 54% tax cut in their 2023 unemployment insurance taxes and the state has dropped into the lowest tax rate schedule.

Rosemary Elebash, Alabama director of the National Federation of Independent, said the announcement is welcome news for Alabama’s small businesses.

[Tell It Right]

Sweet Home Alabama!

[Jemian]

Ping to the state list.

[Openurmind]

Will unemployment benefits also drop 50%?

[Republican Wildcat]

This is one of those things that seems nice now, but could you just be screwing things up down the road? Needing to borrow, incur debt, etc. to pay something you should have had in the bank for harder times?

[Openurmind]

Yep, Sure could... If benefits are also reduced It could eventually effect the economy and general welfare of the whole state.

[citizen]

Article indicates the employer tax was hiked due to the so-called pandemic slowdown, now it’s back to normal, indicating a healthier business & employment climate. In a red state, of course.

[Openurmind]

That is good!

[Farmerbob]

Right now average Alabama unemployment is below 3%. They shouldn’t need as much coming in and the businesses can use the cut to boost pay to attract employees.

[Fledermaus]

State unemployment insurance funds are huge. Most employees aren’t eligible for unemployment payments. Totally depends on why they were terminated.

[afsnco]

Alabama has no problem with money. They have billions in “rainy day” funds (that were never touched during the rainiest of days, the pandemic) in addition to billions in budget surpluses. More tax cuts are needed in this Brainless Biden economy. Alabama’s one of the only states that still fully tax groceries, and the state recently rammed through perpetual automatic gas tax increases.

[6ppc]

In Alabama if you go long enough without laying people off you get a cut in the amount of unemployment insurance your company pays. I learned a hard lesson about that in the mid 80s...had to lay off over half my employees and got hammered the next year. It takes YEARS to get back to a reasonable rate.

[Openurmind]

Interesting... Something to remember. :)

[RetiredArmy]

3% and we still have many places with those HELP WANTED signs. Heck, back about 4, 5 or 6 months ago, Walgreens was offering a $2,500 sign on bonus and higher wages, just to work in their pharmacy. They couldn’t keep people and had to resort to those higher wages and bonuses.

[Svartalfiar]

So does this mean employers get a refund for 46% of what’s currently in their unemployment accounts?

Or are they only cutting the tax rate it’s collected at, not the total amount the employer is required to build up to?

[Svartalfiar]

State unemployment insurance funds are huge. Most employees aren’t eligible for unemployment payments. Totally depends on why they were terminated.

That's because for the past 2.5 years, EVERY termination was "covid-related" so every single UI claim came out of federal funds, not employer accounts. So they all had that time to pay in and get their accounts filled up with nothing coming out, for any employer.

Also, many companies downsized, so now their required balance is gonna be much smaller than the old balance they had.

Companies that went out of business, I assume their accounts are normally burned up on their employees being dropped, but with everything paid by FedGov, I dunno if those accounts are paid out to those companies, or if the States just take the money (probably).