Legislation sponsored by Senator Fred Madden (DGloucester, Camden) that would cut the unemployment insurance (UI) tax rates that will be imposed on employers during fiscal years 2012 and 2013 recently cleared the full Senate. The reduction will save employers $652.9 million total and an average of $208 per employee over the two year period.
“Given the current economic climate, it is important that we take steps to aid businesses in New Jersey, particularly small businesses,” said Madden, chairman of the Labor Committee. “By cutting taxes on employers we are providing them a much needed break, while also sparing the unemployed from a reduction in benefits.”
The bill, S-2730, was one of many measures recommended by the Unemployment Insurance Task Force, of which Senator Madden was a member. The legislation would phase in the scheduled UI employer tax increases over the next three years. Specifically, the bill would shift the employer tax column from “C” to “D” in FY 2012, from “D” to “E” in FY 2013, and from “E” to “E+10 percent” in FY 2014. Column “A” contains the lowest tax rates, while column E+10 contains the highest. If the Legislature fails to act, current law would shift the UI employer tax rates from column “C” to “E+10 percent” on July 1, 2011 because the UI Trust Fund is carrying a negative balance.
The bill would also narrow the tax columns to the configuration that was in place in 2003. New Jersey’s tax tables have been adjusted multiple times since FY 1998 in order to stave off scheduled increases in UI tax rates.
The legislation now moves to the governor’s desk.