Ahhh, but portions of the profit that employers make off of their employees labor goes to federal unemployment insurance, rather than say, the company coffers or into the employees paychecks.
And employers who consistently pay the state unemployment tax can get a credit of up to 5.4 percent, independent of the tax rate they pay to the state.
can you link to this please?
So if I'm working 5 or six years for a company and get laid off, an extension to my unemployment insurance isn't out of the question or breaking the bank.
Costs are Truly Shared by Federal and State Government
Operating as a federal-state partnership, UC is based on federal law, but administered by the states.
The UC program is unique among U.S. social insurance programs in that it is funded almost totally by either federal or state taxes paid by employers.
Currently, employers pay federal unemployment taxes of 6.2 percent on the first $7,000 earned by each of their employees during a calendar year. These federal taxes are used to cover the costs of administering the UC programs in all states. In addition, the federal UC taxes pay one-half of the cost of extended unemployment benefits (during periods of high unemployment) and provide for a fund from which states may borrow, if necessary, to pay benefits.
State UC tax rates vary from state-to-state. State UC taxes may be used only to pay benefits to unemployed workers. The state UC tax rate paid by employers is based on the state's current unemployment rate.
As their unemployment rates go up, the states are required by federal law to raise the UC tax rate paid by employers.
Almost all wage and salary workers are now covered by the federal-state UC program. Railroad workers are covered by a separate federal program. Ex-service members with recent service in the Armed Forces and civilian federal employees are covered by a federal program, with the states paying benefits from federal funds as agents of the federal government.
Unemployment Benefits: A Federal-State Lifeline for the Unemployed
It really doesn't matter you could say 10 years. the point is what you are being paid bi weekly in UC as compared to the employer contributions based on the 6.2% of 7K of your salary over the years. It appears the employers are pretty much on the hook for it all and in some states as I noted their rates go up if unemployment goes higher than the states established benchmark, which is a sure bet now I would imagine in this economy as seen below.
as far as your
judgment that you are not "breaking the bank" or additional benefits is "out of the question" seems to be problematic.
Unemployment taxes slam businesses
By Tami Luhby, senior writer
February 9, 2010: 10:48 AM ET
NEW YORK (CNNMoney.com) -- Employers are getting hit with a massive tax hike at a time when they can least afford it.
Companies in at least 35 states will have to fork over more in unemployment insurance taxes this year, according to the National Association of State Workforce Agencies.
The median increase will be 27.5%. And employers in places such as Hawaii and Florida could see levies skyrocket more than ten-fold.
Many of these hikes happened automatically as prolonged joblessness triggered state laws governing their unemployment insurance systems. But at least seven states voted to raise their taxable wage bases, the level of income subject to unemployment tax. And another 10 are looking at upping the wage bases or tax rates.
The states are scrambling to restore their unemployment insurance trust funds, which cover claims.
State trust funds have been decimated by the Great Recession, forcing a record 26 states to borrow a total of more than $30 billion from the federal government. The numbers are expected to grow to 40 states borrowing $90 billion by 2012, said George Wentworth, policy analyst at the National Employment Law Project.
"States are going to be facing higher unemployment tax rates for some period of time," Wentworth said.
In addition, employers pay federal unemployment taxes. If states don't repay their federal loans, businesses could see their federal tax go up as well in coming years, said Rich Hobbie, executive director of the National Association of State Workforce Agencies.
Higher taxes, however, dampen employers' ability to hire new workers, crimping any nascent economic recovery. Companies pay taxes on each employee on the payroll.
"There's no doubt it discourages hiring," said Douglas Holmes, president of UWC-Strategic Services on Unemployment and Workers' Compensation, an employers' trade group. "In fact, it leads to increased unemployment."
Cognizant of this, some states are looking to soften the blow through legislation that would delay the hikes.
Companies paying more in unemployment taxes - Feb. 9, 2010