Unemployment insurance tax rates fall in 2014
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[January 13, 2014]
CHICAGO — Unemployment insurance
tax rates for most businesses will fall in 2014 as the state economy
improves and more people return to work, the Illinois Department of
Employment Security said last week. Employers who did not reduce
their workforce in 2013 typically will see the greatest savings.
Lower tax rates and stronger tools to stop waste, fraud and abuse
were part of 2011 legislation that reformed the unemployment
insurance program and contributed to saving more than $271 million
in the past two years.
"This is another example of why Illinois is an attractive place
for businesses looking to grow," said IDES Director Jay Rowell.
"Falling unemployment insurance rates means employers have more
money to hire additional workers."
Illinois' unemployment insurance taxes make up 0.7 percent of the
average employer's per-employee compensation cost — or seven-tenths
of 1 cent for each dollar paid. Unemployment insurance tax rates
generally are separated by business type, such as transportation and
warehousing or mining. Each of these nine types is lower in 2014.
Minimum and maximum tax rates also are established. In 2014, the
maximum tax rate of 8.0 percent is down from 8.4 percent. The
minimum rate of 0.0 percent is unchanged. Additionally, there is a
0.55 percent fund building rate all employers pay. Tax rates in 2014
are applied to the first $12,960 of wages.
Unemployment insurance taxes pay for benefits that workers
receive when they are laid off. In Illinois, the taxes support 26
weeks of unemployment benefits. Operational funding for IDES —
dollars used to pay salaries and utilities, for example — come from
federal funds through the U.S. Department of Labor, not from
unemployment insurance taxes nor from the state's general revenue
budget in Springfield.
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Other factors are considered when calculating an employer's tax
rate, including the trust fund balance, the number of workers an
employer laid off and the economic climate of the past three years.
The long-standing formula allows better planning for employers and
eliminates steep, yearly movement in tax rates.
IDES is the state's employment agency. In addition to
administering the unemployment insurance program, it manages the
state's hiring board at
IllinoisJobLink.com. Job seekers can post multiple resumes to
highlight specific skills and target multiple jobs. Employers can
use word-search technology, veteran status and professional
licensure to find specific candidates and qualify for tax
incentives. There were more than 200,000 help-wanted online job
advertisements in November, 84 percent of which sought full-time
IllinoisJobLink.com to apply for these jobs can help maintain
eligibility for unemployment insurance.
Illinois Department of
file received from the
Illinois Office of Communication and Information]