Unemployment Tax
Florida – Florida’s nearly half a million employers are receiving large increases in their unemployment insurance taxes. State legislators are looking for ways to provide relief. House speaker Larry Cretul has called for the Legislature to fast track a bill to delay the tax increase. As of January 1, the minimum tax rose to $100.30 for an employee for 2010, up from $8.40 an employee. More than half of employers pay the minimum rate, according to the State Department of Revenue. The insolvent unemployment insurance trust is one factor; Florida’s Agency for Workforce Innovation has borrowed more than $1 billion from the U.S. Department of Labor to pay for unemployment benefits since last August.

Kentucky – Kentucky employers would gradually pay more in taxes to fix the state’s Unemployment Insurance Trust Fund — but not nearly as much as they would if the state continues borrowing to keep the beleaguered fund afloat. Jobless workers would generally receive slightly less in weekly benefits and would have to wait a short time before receiving the assistance, starting in 2012. Business and labor leaders embraced those concessions in jointly pushing legislation aimed at shoring up the trust fund — under increasing pressure as Kentucky’s unemployment rate mushroomed amid the nation’s worst economic downturn in decades. The bill, a product of a governor’s task force, cleared its first hurdle by winning bipartisan approval from the House Labor and Industry Committee.

Minnesota – With a record 240,000 people collecting jobless benefits in Minnesota, tax hikes to cover mounting costs of the unprecedented payouts are beginning to show up for employers and that bill is expected to keep growing for many years. This year, the increase amounts to $200 million. That will push total annual contributions from employers to jobless benefits to $1.1 billion. State officials anticipate similar increases over at least the next four years as the state grapples with an economy that creates few new jobs and taps the federal government for loans to cover the cost of issuing unemployment checks. The state’s trust fund is paying out more than it takes in, resulting in a deficit at the end of December of $286 million. By the end of 2010, the deficit is expected to sit at $800 million and double that by the end of 2012.

Hawaii – As anticipated, Gov. Linda Lingle proposed a big break in the unemployment insurance tax paid by Hawaii businesses. If approved by the Legislature, Lingle’s plan would allow employers to pay only 60 percent of the amount they were to pay in unemployment tax bills coming due this year. The governor said the plan would save businesses $497 million over the next four years. It would mean the average business would pay unemployment insurance tax of about $600 per year per employee, rather than the $1,000 that is required by the existing law. Businesses are now paying about $90 a year because of a temporary tax break that started in 2008.The Republican governor, who made her remarks during her final state-of-the-state address at the Capitol, urged lawmakers to pass unemployment legislation insurance before mid-March.

New Mexico – Businesses could pay $20 million in higher taxes under a proposal by Gov. Bill Richardson’s administration to shore up the program that provides unemployment benefits to jobless New Mexicans. The unemployment insurance trust fund will run out of money by next year, triggering an even larger tax increase for employers, if the Legislature and governor don’t agree on a rescue plan during the legislative session. The fund is being drained because of rising unemployment during the past year. About 75,000 New Mexicans were unemployed in November — an increase of about 31,000 from a year ago. The Department of Workforce Solutions outlined the administration’s unemployment tax proposal to a Senate committee. The agency recommends that employers pay higher contributions averaging 22 percent.

New Jersey – New Jersey businesses are facing a significant tax hike this summer if the federal government doesn’t help replenish the state’s unemployment fund, Gov. Chris Christie warned last week. New Jersey’s Unemployment Insurance Fund will be $1.6 billion in debt by March, according to Christie. Business taxes are automatically increased by law when the funds balance goes below a certain level as measured every March. The new Republican governor plans to ask the federal government to forgive loans that are keeping the fund solvent, but warned that there was no money in the state budget to stop the tax increase. In a worst-case scenario, employers could see an increase of up to $1,000 per employee in their unemployment tax starting July 1.

Rhode Island – Rhode Island employers saved more than $500 million in the state unemployment tax over the last decade or so. Those savings, the result of a change in state law, also left Rhode Island’s unemployment trust fund vulnerable to a downturn. The trust fund is now depleted, partly because of an increase in demand for jobless benefits amid a punishing recession and persistently high rates of unemployment. As a result, the trust fund has had to borrow more than $140 million so far from Uncle Sam to help pay benefits. And employers are on the hook for higher taxes at a time when they can ill-afford to pay.

Maryland – As the General Assembly launches straight into a fight over ways to keep the state’s unemployment insurance fund solvent, tax rates may skyrocket 50 percent over last year because of the strain that the recession has put on the unemployment fund. For coffers to recover the fund’s losses – caused by the drastic rise in unemployment, now 7.4 percent in Maryland, and the lack of $1.5 billion in taxable wages – the rates will go up for all employers statewide.

Kansas – Legislators questioned how new corporate tax rates are being calculated to raise $209 million for Kansas unemployment benefits. The state is automatically adjusting its tax rates because the Unemployment Insurance Trust Fund expects to run out of money by mid-February. The Department of Labor notified 69,500 businesses in mid-December; the changes took effect with the new year, and the first quarterly payments are due in April. Some businesses are upset by the increases and because they were notified only two weeks in advance of the changes
taking effect.

Paid Sick Leave
Milwaukee, Wisconsin – The future of Milwaukee’s sick leave law might hinge on the wording of a referendum question city voters approved in November 2008. The law requires workers get at least one hour of paid sick leave for every 30 hours worked in Milwaukee. Companies with fewer than 10 workers must offer at least five sick days, and larger companies must let employees accrue at least nine days. Milwaukee County Circuit Court Judge Thomas Cooper last year struck down the law as unconstitutional, ruling it is invalid because the paid sick days can be used to give recovery days to victims of domestic or sexual violence.

Maine – Maine business groups are lining up in opposition to a bill that would guarantee paid sick time in the state. The bill sponsored by Senate President Elizabeth “Libby” Mitchell received a hearing before the Labor Committee last month. It would provide earned sick leave of up to six paid days annually for workers in large businesses and three for those in smaller businesses. Mitchell is one of several Democrats running for governor. She calls the legislation an act to prevent the spread of H1N1, because it would enable people to stay home when they’re sick. Business groups oppose the bill, saying it imposes new costs while they’re reeling from the recession.

EEOC Compliance
Montana – The Montana Department of Labor and Industry is warning Montana businesses of a scam involving required workplace posters. The posters are available for free, but callers are phoning businesses in an attempt to sell them. “We are getting calls from businesses across the state who are being threatened by these companies that they will be fined unless they purchase updated employment posters from the company. That simply isn’t true,” state Labor Commissioner Keith Kelly said. Updated employment law posters required by federal law are available at Department of Labor and Industry Job Service offices across the state. These new posters include the Genetic Information Nondiscrimination Act addition to the Equal Employment Opportunity portion of the poster. The 17-inch-by-22-inch glossy poster is available at no cost to employers.

Job Creation
– Gov. Martin O’Malley’s proposed job-creation tax credit may have the support of several business associations, but some small business owners are saying it won’t help. The proposed legislation would offer a $3,000 tax credit to businesses that hire unemployed Marylanders. Employees would have to be receiving unemployment benefits or have exhausted their benefits within the past 12 months to qualify. Employers could claim the credit for each new employee, up to $250,000.The credit would apply only to employees hired between Jan. 1 and Dec. 31, 2010. The initiative, part of the jobs-creation package heralded in O’Malley’s State of the State address, is estimated to cost $20 million. The House bill and its Senate counterpart have received the support of the Restaurant Association of Maryland, the Greater Baltimore Committee and the Maryland Association of Nonprofit Organizations.

Oklahoma – A federal appeals court panel upheld much of an injunction against Oklahoma’s tough anti-illegal immigrant law but said the state can now force public contractors to cross-check employee names against a government list of eligible workers. In a divided opinion, a three-judge panel of the 10th U.S. Circuit Court of Appeals in Denver ruled that the U.S. Chamber of Commerce and several other pro-business groups had legal standing to challenge Oklahoma’s immigration law. The law sought to subject businesses that hire illegal immigrants to financial penalties, dictate who can and cannot be fired and require contractors to withhold taxes for workers without proper documentation. The case will now be returned to the U.S. District Court in Oklahoma City for a judge to decide whether a permanent injunction against the law should be issued.

Health Care
Kansas – Some Kansas lawmakers are pushing a state Constitutional Amendment to exempt Kansas should the U.S. Congress pass a requirement that all Americans have health insurance. The proposed amendment would say no law can require individuals or employers to participate in any health care system. Similar amendments have been proposed in many other states, including Missouri. U.S. Congressmen Todd Tiahrt and Jerry Moran attended a news conference in the Statehouse announcing the legislation’s introduction. Tiahrt predicted legislation like the proposed amendment could be the basis for legal challenges to any health care reform passed by Congress. To be added to the state constitution, the legislation must be passed by a two-thirds majority of the Kansas House and Senate and then be approved by voters next year.