Vermont Business Magazine The Vermont Department of Labor has announced that effective July 1, 2022, employer unemployment insurance (UI) contributions, or taxes, will decrease as the UI tax schedule moves from Schedule III to Schedule I. This change is part of an annual statutory calculation performed by the Department of Labor’s Economic and Labor Market Information Division.
In addition, taxable employers will receive additional relief in January 2023 when the UI taxable wage base (TWB) decreases by $2,000. The TWB is the amount of wages paid to an employee that employers pay taxes on. Effective January 1, 2023, the TWB will decrease from its current level of $15,500 to $13,500. Employers will pay UI taxes on the first $13,500 an employee makes in a calendar year. The last time the taxable wage base was near this level was in 2011 when it was set at $13,000.
Employer contributions received by the Department of Labor go to claimants in weekly benefit payments. 100 percent of contributions are used for this purpose.
“Providing tax relief to Vermont businesses, is a win for all Vermonters. During the 2021 legislative session, the Department advocated to remove 2020 from the formula that determines the tax schedule and taxable wage base. Without removing this significant outlier, employers would have been terribly impacted by the hit the UI trust fund took as a result of the pandemic,” said Commissioner Michael Harrington. “We appreciate the work that Representative Michael Marcotte and the House Commerce Committee did to lessen the lasting effects of the pandemic on employers and the entire system.”
In addition to the employer contribution rate, the maximum weekly benefit amount was also updated through the annual determination process. As of July 1, 2022, the maximum weekly benefit amount will increase from $583 to $668. This increase will take effect for the benefit-week-ending July 9. At any given time, approximately 25 to 30 percent of the UI claimant population receives the maximum weekly benefit amount.
Additional adjustments made through annual determinations include the average UI benefit cost rate for non-profits, the new employer UI tax rate, and the UI quarter qualifying wage. Visit labor.vermont.gov for the official annual determinations, as well as for resources on unemployment and re-employment services, and more information on the Vermont Department of Labor.
6.23.2022. Montpelier www.labor.vermont.gov