Nebraska employers figured that they might pay higher unemployment insurance taxes next year, but now they're getting the specifics: Rates will more than double for most companies.
Although the increases can vary widely among employers, most rates will increase about 165 percent. The average annual payment per employee will increase to $300 from $113, beginning in April.
The State Labor Department mailed notices this week to 47,000 Nebraska employers with the specific payment rates, from zero to a maximum of $780 per employee. The previous maximum amount was $486.
Even so, said David Brown, president and chief executive of the Greater Omaha Chamber of Commerce, “The timing couldn't have been worse to have this kind of an increase. This is really a burden on all businesses and particularly small businesses. They're already trying to figure out how to maintain cash flow.”
Brown said the Legislature could change the way the tax rate is determined, so it could be adjusted to allow for unusual economic conditions. But it's too late to halt the 2010 increases.
The stiff increase revives a debate about whether the state should have gone after $43.6 million in federal stimulus funds designed to soften the recession's impact on state unemployment insurance trust funds.
This is the fifth year that Nebraska has determined the rates under a 2005 state law that sets a mathematical formula to keep the employer-funded unemployment insurance trust fund solvent.
Between Oct. 1, 2008, and Sept. 30, 2009, the trust fund paid out $189 million in unemployment benefits, more than double the $90 million paid out in the previous fiscal year. To replenish the fund, the formula raised the rates that employers will pay in 2010.
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