Responding to rising jobless claims, unemployment tax rates have more than doubled this year. The 2010 increase comes after a 70 percent increase a year ago and most states unemployment rates are at their highest levels since the great depression.
This is an employer paid tax and is calculated by a standard base rate and a modification factor based on the employers history of employees filing claims. The formula for setting the standard base rate is usually based on a fund’s record for previous years. In most cases it will include a 20 year period.
Officials say the tax will remain high at least through 2011 and maybe 2012 as more people go back to work and the states repay federal money it has had to borrow to pay benefits.
Employers will have to battle through the higher tax rates by demanding more productivity out of current employees as well as possibly cutting other benefits.