The Great Recession has been over for several years now, but its effects are still being felt today. It took its toll on everyone, from the average worker to the largest corporation.

On a state-by-state basis, the surge in unemployment insurance claims – resulting in debt and immense borrowing from the federal government – has fallen on the shoulders of local employers. Since that time, however, many states have found ways to return to solvency and relieve some pressure from the companies with high unemployment insurance tax rates.

As a result, 2015 could become the year of the tax decline if the economy continues its forward progress. According to a December Moody’s Analytics report, the growing job market has the U.S. economy back on the right track.

“The U.S. economy is finally off and running, with the number of jobs continuing to grow and wages finally starting to rise, which will also bolster the prospects for the housing recovery,” said Mark Zandi, managing director and chief economist at Moody’s Analytics.

More UI tax breaks could be on the horizon
The strong gains across the country have helped spur unemployment insurance improvements, especially lower tax rates for many employers. States with recent declines include South Dakota, New Hampshire and Hawaii, among others.

“Tax revenue is on the way down for many states.”

The National Association of State Workforce Agencies’ annual UI tax survey also found increased optimism among state agencies. NASWA reported that for the first time in the survey’s five-year history, a majority of states expected their UI tax revenue to decline. Over the past several years, many of the gains in tax revenue were due to an increase in the taxable wage base and more employers in higher tax schedules.

That trend appears to be shifting. Now, fewer employers are facing higher UI tax rates, and as a result, more states are seeing a decline in tax revenue. This isn’t an issue for most, thanks to the stronger economy, fewer unemployment insurance claims and more stable UI trust funds. According to NASWA, few states are creating legislation to address UI financing with only 29 percent passing bills in 2013.

Juggling tax rates and difficult employees can become challenging at your company. Here at Corporate Cost Control, we understand these problems and are well-positioned to help. Our extensive background in cost control and human resources will allow you to better manage your unemployment insurance expenses.


Contact CCC to see how we can save your organization time and money.
Contact our Sales Team
(800) 207-6926

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