PROPOSED UNEMPLOYMENT TAX RATE LOWER FOR 2020
Every year as the air gets cooler, work gets a little busier for us at NAE. While employers are preparing for the end of the year, we are making sure that they have all the necessary information to succeed. For some of us, that means a trip to the Legislative building every October. This year, at the meeting to establish the Unemployment Insurance Tax Rate for Nevada employers, several interesting points were discussed as we head in to 2020. At NAE, we work diligently to update employers with changes to legislation, unemployment and anything else that may affect our members.
As most employers know, the unemployment rate is low but currently, we are at the lowest it’s been since the 1960’s. We are in the midst of the longest economic expansion in U.S. history which is currently at 122 months. The Nevada State Unemployment trust fund has consistently seen growth over the past several years. Currently, it is the highest it has ever been at $1.8 billion. When the last recession occurred, we had to receive assistance from the Federal Government. Not only did we pay that debt back quickly, but now we have more than doubled the amount in our trust fund.
Nevada’s Unemployment Insurance benefit cost rates are the lowest they have been since World War II. The average experience rate in 1944-1945 was 2.7% for employers. In 1945, the weekly benefit amount was between $18 – $24 whereas today it is $469. Minimum wage averaged $0.40 per hour in 1945 and now they are $7.25/$8.25 per hour depending on what benefits are offered.
Today, it was proposed to lower the tax rate for employers in Nevada to 1.65% + 0.05% CEP = 1.70%. This is a significant drop for employers as the 2019 rate was 1.85% + 0.05% CEP = 1.90%. The hearing to adopt the new rate will be held on December 5, 2019.
Effective January 1, 2020, the Nevada taxable wage base for calendar year 2020 is $32,500 (up from $31,200 in 2019). The taxable wage base is calculated each year at 66 2/3% of the average annual wage paid to Nevada workers. While total wages paid to each employee must be reported each quarter, unemployment insurance taxes are only paid on an individual’s wages up to the taxable wage base during a calendar year. Employers will continue to be assigned a contribution rate based on their individual experience rating. These experience ratings vary based on the employer’s previous experience with unemployment.
The unemployment insurance process can be complex and represents a considerable risk to a business’ bottom line. Instead of facing this risk alone, Nevada employers can turn to an experienced provider of unemployment insurance administration. To learn more about how NAE can help with unemployment insurance administration, please contact us at (775) 329-4241 or email@example.com.
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