Now that 2015 is finally here, the news coming out of many states involves lower unemployment insurance costs, improved labor markets and more positive conditions moving forward.

While many of those trends are present in New Mexico, employers there are realizing that they could soon have higher UI tax rates, not lower, like some of their neighbors. As reported by the Albuquerque Journal, as many as 45,000 businesses in the state will be affected by changes to the current unemployment insurance system. As a result, they will have higher tax rates in 2015 than in years prior.

For example, New Mexico-based business Land of Enchantment Inc., with only eight employees, will see its quarterly unemployment insurance contribution rise from roughly $300 to nearly $3,000, or a rate change from 0.4 percent to 3.88 percent, the media outlet noted.

“We had one unemployment claim last year,” Land of Enchantment’s operations manager and associate broker Catherine Martin-McKenzie told the Albuquerque Journal. “I’ve been here for almost 14 years and that was the first person who had a claim against us.”

Employers were notified of the rate changes in early December by the New Mexico Department of Workforce Solutions. The new contributions were actually determined by legislators two years ago, but the effective date was set for 2015. Any changes are related to an employer’s previous number of claims.

New Mexico faces high unemployment
While employers are concerned about the new rate changes in the state, many local workers are also dealing with economic hardships.

“Trust fund solvency is a key reason behind employers’ higher tax rates.”

According to the DWS, the jobless rate was at 6.4 percent in November, higher than the national rate of 5.8 percent for the month. Compared to October, New Mexico’s rate dropped by only 0.1 percent. On a yearly basis, the state gained 14,100 jobs, lead by the education and health services industry.

The high number of unemployed in New Mexico has strained its unemployment insurance trust fund, which is used to cover benefits for jobless residents. The fund’s solvency was a driving factor in the rate changes that were just implemented, and legislators believe that the new rates for employers will keep the trust fund out of debt for the foreseeable future.

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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