The end of 2014 is upon us, which means that states are getting their fiscal responsibilities in order before the new year. As a result, there have been a rash of announcements related to unemployment insurance taxes, with many states declaring lower rates for employers.

One state to join this growing list is Hawaii. According to the local Department of Labor and Industrial Relations, or DLIR, employers can expect a reduction of 22 percent on average in 2015. Overall, this will mean more than $50 million in savings for businesses in the state.

This change is tied to Hawaii’s Unemployment Compensation Trust Fund, which is used to fund benefits across the islands. During and after the Great Recession, the high number of jobless put a strain on the system. But now that the economy is moving in the right direction, employers won’t be called upon as heavily to supplement the Trust Fund.

“This is welcome news to many small businesses throughout the state who can now consider investing the savings in their businesses and personnel,” explained Gov. David Ige in a statement. “The Trust Fund is designed to replenish its balance when times are better so the taxes on employers do not rise when the economy falters and when employers can least afford higher taxes.”

“Hawaii employers could save a total of $50 million thanks to UI tax rate reduction.”

Jobless rate declines in Hawaii
A key reason for the decline in unemployment insurance taxes is the current jobless rate in Hawaii. According to the DLIR, the state had a rate of only 4.1 percent in October, down from 4.2 percent in September.

There were more than 640,000 residents with employment in October, while only 27,650 were unemployed. Some of the strongest industries in Hawaii have been the trade, transportation and utilities sector, as well as mining, logging and construction. Naturally, leisure and hospitality also employs a significant percentage of the population.

Overall, the employment trend in Hawaii has been moving in the right direction. The DLIR reported that the unemployment rate was near 7 percent back in January 2010, and since that time the decline has been fairly steady. For the state, this is a sign that there are more positives to come.

At Corporate Cost Control, we work closely with employers across the country to better manage the nuances of unemployment insurance. Legislation changes on the state level could impact you today, and we welcome any questions or concerns you may have on a wide range of topics.


Contact CCC to see how we can save your organization time and money.
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