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Senate Bill 5478 (SB 5478), sponsored by Senator Karen Keiser (D – 33rd District) corrects a problem with the way in which the state calculates the unemployment tax rate for employers. The bill would adjust the unemployment tax increases that were caused by the state mandated shutdowns last year.
Employers are assessed a rate class from 1 to 40 based on the charges against the contributions made to the unemployment account from previous employees claiming unemployment benefits. The more claims, the higher the rate class and the higher the following years unemployment taxes will be.
Due to the mandated pandemic lockdowns last year, many employers have found their rate class higher than expected through no fault of their own. In one case, a gym owner saw rates explode by over 1000%.
Senate Bill 5061, enacted earlier this legislative session, provided unemployment benefit relief to employers, but didn’t go far enough to address the rate class increase problem.
SB 5478 would address some of the shortcomings of Senate Bill 5061 and would allow an employer to request unemployment benefits that were paid due to the pandemic lockdowns not be counted against the employer's rating.
This change would help small businesses avoid some of the potential massive tax increases scheduled for the next few years that were caused through no action, or fault, of the business.
SB 5478 has passed the senate and is waiting for a hearing in the house. Since it would be considered necessary to pass the budget (due to its budgetary impacts to the bi-annual budget), it may still see a vote in the house before the end of session.
