California Employer UI Taxes Set for Steady Annual Increases – Lake County Chamber of Commerce

California Employer UI Taxes Set for Steady Annual Increases – Lake County Chamber of Commerce.

$10.7 Billion Unemployment Insurance Fund Deficit

Forecast by End of Year

Persistent high unemployment in California and the continuing insolvency of its unemployment insurance (UI) fund mean employers in California will be paying ever-increasing federal taxes for years to come—unless there is corrective action.

California is one of 28 states listed on the U.S. Department of Labor website as having an outstanding loan from the Federal Unemployment Account (FUA), accounting for 26% of the total $38.85 billion owed as of February 29.

California’s outstanding loan balance of more than $10.2 billion is close to triple (2.75 times greater than) that of the state with the next highest balance (New York, which owes more than $3.7 billion).

Each employer pays a tax rate based in part on the amount of benefits that have been paid to former employees. During good economic times, employers that have fewer claims are rewarded with a lower tax rate.

Because of the continuing financial difficulties facing the UI Trust Fund, all employers in California are paying state taxes under the highest schedule rate allowable under state law, plus a 15% solvency surcharge.

What this means for clients of  In-Home Caregiver companies is higher fees (to cover the higher employer taxes) now, and for years to come.

Tim Colling
Tim Colling

Tim Colling is the founder and President of A Servant's Heart In-Home Care, which provided in-home caregiving services in San Diego County, and also of A Servant's Heart Geriatric Care Management, which provided
professional geriatric care management services and long term care placement services in San Diego County. Tim has more than 30 years of experience in management in a variety of industries. He held a Certified Care Manager credential from the National Academy of Certified Care Managers. Tim is also a Certified Public Accountant (retired), and received his Bachelor’s Degree in Accounting from California State University at San Diego. In addition to writing blog posts here for the Servant’s Heart blog, Tim also is a regular contributor to and to as well as blogs of other eldercare services provider companies. Finally, Tim is also the president of A Servant's Heart Web Design and Marketing, which provides home care marketing as well as website design and online marketing for those who serve the elderly and their families.

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