No change in Nevada unemployment tax
The average tax rate employers are charged to fund Nevada’s unemployment insurance program for 2003 will remain unchanged at 1.29 percent of an employee’s wages.
Fred Suwe, deputy administrator for the state Employment Security Division, said Monday the division accepted a recommendation from an advisory panel to retain the rate for the third year in a row.
“It’s just a repeat of 2002, which was a repeat of 2001,” Suwe said following a brief hearing on the rate, suggested last month by the state Employment Security Council.
The revenue generated by the tax goes into a trust fund that’s used to pay jobless benefits to laid-off workers. The state expects the fund to cover nearly 928,000 workers next year.
The council said expected payouts from the fund would lower its ending balance to about $431 million by the end of 2003. But the ending balance would still be well above a minimum solvency requirement of $346 million.
Council members represent employers, employees and labor interests, and are appointed by the governor.
Last year, the division was able to leave the average tax rate at 1.29 percent for 2002 despite many layoffs and unemployment claim payouts following the Sept. 11, 2001, terrorist attacks.
For the 2002 calendar year, payouts from the fund are estimated at $360 million, up from $241 million in 2001. The estimated payout for 2003 is $330 million.
The 1.29 percent rate applies to the first $21,500 in employee wages, and is an average. The actual rates range from a low of 0.25 percent to a high of 5.4 percent, depending on each employer’s actual experience with layoffs and jobless claims.
Almost half of the state’s current 25,848 employers pay the lowest rate. New employers pay a 2.95 percent rate until they can be rated based on actual experience. The highest taxpayers typically include construction companies that regularly lay off workers
The trust fund was helped this year by an infusion of $68 million from the federal government. It was part of an $8 billion nationwide distribution from federal employment administrative accounts that had exceeded their maximum levels.