82.1 F
Charlotte Amalie
Wednesday, May 25, 2022
HomeNewsArchivesUNEMPLOYMENT TAX CUTS MEAN 'NOTHING' TO SOME

UNEMPLOYMENT TAX CUTS MEAN 'NOTHING' TO SOME

Dec. 19, 2001 – Starting Jan. 1, most employers will see a reduction in the amount of money they must pay into the Labor Department's Unemployment Trust Fund.
The move, which was mandated by the Legislature, brings the territory into compliance with federal guidelines requiring only that the fund be maintained at a level higher than the amount of money the territory pays to laid-off workers.
Labor Department spokeswoman Rhona Martinez said the Legislature took into account the poor state of the economy as well as the territory's overly healthy Unemployment Trust Fund in revising the contributions schedule downward.
At a Sept. 8 Senate Labor and Veterans Affairs Committee hearing on the proposal, Sen. Norma Pickard- Samuel said local employers had "grossly overpaid" the unemployment insurance tax. "There has been a heavy burden on employers," Martinez said Tuesday. She said the trust fund currently stands at $64 million and is continuing to earn interest.
Starting in January, employers with no history of layoffs — those who qualify for the "minimum rate" — will not have to contribute anything to the fund. Currently they contribute 0.1 percent of $15,900 per year for each employee. The $15,900 will continue to be the base for computing contributions. The rate for new employers will drop to 1 percent of that base from the current 1.5 percent.
Employers who fall behind on their payments will no longer be assessed a delinquency rate. However, any who are delinquent on Jan. 1 will continue to be assessed a 9 percent annual interest rate on the unpaid contributions, and any who file reports late will continue to incur a penalty of $5 a month.
There also will be a change in the contribution rates for employers who have a "negative reserve ratio," the Labor Department term for what results when a company's laid-off workers collect more in benefits than their employer has paid into the Unemployment Trust Fund. That rate had been a flat 5.4 percent. Starting in January, it will vary from nothing to 6 percent, based on the company's record.
For more information, call the Labor Department's Division of Unemployment Insurance Tax Unit at 776-3700 on St. Thomas or 773-1440 on St. Croix.

Print Friendly, PDF & Email
Keeping our community informed is our top priority.
If you have a news tip to share, please call or text us at 340-228-8784.




Support local + independent journalism in the U.S. Virgin Islands

Unlike many news organizations, we haven't put up a paywall – we want to keep our journalism as accessible as we can. Our independent journalism costs time, money and hard work to keep you informed, but we do it because we believe that it matters. We know that informed communities are empowered ones. If you appreciate our reporting and want to help make our future more secure, please consider donating.

STAY CONNECTED

20,771FansLike
4,722FollowersFollow

FROM FACEBOOK

Comments Box SVG iconsUsed for the like, share, comment, and reaction icons
Load more
Dec. 19, 2001 - Starting Jan. 1, most employers will see a reduction in the amount of money they must pay into the Labor Department's Unemployment Trust Fund.
The move, which was mandated by the Legislature, brings the territory into compliance with federal guidelines requiring only that the fund be maintained at a level higher than the amount of money the territory pays to laid-off workers.
Labor Department spokeswoman Rhona Martinez said the Legislature took into account the poor state of the economy as well as the territory's overly healthy Unemployment Trust Fund in revising the contributions schedule downward.
At a Sept. 8 Senate Labor and Veterans Affairs Committee hearing on the proposal, Sen. Norma Pickard- Samuel said local employers had "grossly overpaid" the unemployment insurance tax. "There has been a heavy burden on employers," Martinez said Tuesday. She said the trust fund currently stands at $64 million and is continuing to earn interest.
Starting in January, employers with no history of layoffs -- those who qualify for the "minimum rate" -- will not have to contribute anything to the fund. Currently they contribute 0.1 percent of $15,900 per year for each employee. The $15,900 will continue to be the base for computing contributions. The rate for new employers will drop to 1 percent of that base from the current 1.5 percent.
Employers who fall behind on their payments will no longer be assessed a delinquency rate. However, any who are delinquent on Jan. 1 will continue to be assessed a 9 percent annual interest rate on the unpaid contributions, and any who file reports late will continue to incur a penalty of $5 a month.
There also will be a change in the contribution rates for employers who have a "negative reserve ratio," the Labor Department term for what results when a company's laid-off workers collect more in benefits than their employer has paid into the Unemployment Trust Fund. That rate had been a flat 5.4 percent. Starting in January, it will vary from nothing to 6 percent, based on the company's record.
For more information, call the Labor Department's Division of Unemployment Insurance Tax Unit at 776-3700 on St. Thomas or 773-1440 on St. Croix.