Question about...JBE threatening businesses with 30% Surtax on Payroll to pay unemployment

“If the UTF falls even further, the REC would have to raise taxes even more. For a UTF balance between $100 million and $400 million, the first 10% discount on the $8,500 wage base is lost. If the balance is below $100 million, the REC can assign a solvency tax up to a 30% increase over the normal rate, or a surtax based on the state’s repayment of debt and interest on unemployment benefits paid.”

frick him

UI tax is a tax on your quarterly gross payroll paid to all employees. In a normal time if your quarterly payroll was $100,000 gross, and a normal UI Tax provided by Louisiana Workforce Commission is 1.87% you would owe $1870.00. What JBE is saying you would be taxed at a 30% rate of quarterly payroll so instead of $1870 the business now has to pay $30,000.00. It’s a death wish. Employers would move to cash only or impose mass layoffs. Or just close.

Not if they took those PPP Loans they fricked

Is this another dumbass rule that could be fixed with a constitutional convention?

It’s the business that bears the brunt of this potential BS. They ask us to hire to jumpstart that economy then bend us over backwards. If this happens it could be a death blow to Louisiana as businesses will just close down or not pay the tax. Sometimes the state should consider NOT paying unemployment if they don’t have the funds.

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UI tax is a tax on your quarterly gross payroll paid to all employees. In a normal time if your quarterly payroll was $100,000 gross, and a normal UI Tax provided by Louisiana Workforce Commission is 1.87% you would owe $1870.00. What JBE is saying you would be taxed at a 30% rate of quarterly payroll so instead of $1870 the business now has to pay $30,000.00. It’s a death wish. Employers would move to cash only or impose mass layoffs. Or just close.

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That is not correct. The 30% surtax is not a 30% tax on payroll, it's basically increasing your tax rate (which varies by company) by 30%.

So in your example, if your UI rate is 1.87%, it will become 1.3 times 1.87%, so your new UI rate will be 2.44%.

For people bashing JBE, this has been a law for a long time, and pretty much every state not only has something similar, but is about to deal with this. It's not just Louisiana.

I saw that thread on the PT, and me trying to explain that over there would have been a lost cause.

Yes, it is a tax increase, which I agree is not the best idea right now. Now, it's not JBE wanting to raise taxes. If the feds bail out the state unemployment funds, it won't happen, and that's what JBE (as well as other governors) are trying to do.

I guess no one read this part:

“I know that we can all agree that now is not the time to put increased burdens on Louisiana businesses with additional taxes and assessments. Therefore, I am requesting that Congress include in this legislation either loan forgiveness or additional funding that can be used to adequately shore up our trust fund so that this obligation does not fall on Louisiana businesses.”

quote:

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UI tax is a tax on your quarterly gross payroll paid to all employees. In a normal time if your quarterly payroll was $100,000 gross, and a normal UI Tax provided by Louisiana Workforce Commission is 1.87% you would owe $1870.00. What JBE is saying you would be taxed at a 30% rate of quarterly payroll so instead of $1870 the business now has to pay $30,000.00.

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You don't pay UI on your entire payroll - the tax base is currently the first $7,700 per employee each year.