Employers across the Commonwealth estimated to save approximately $74M next year
RICHMOND – Gov. Terry McAuliffe announced today that Virginia employers will enjoy lower unemployment insurance (UI) taxes next year as a result of Virginia’s improved economy.
Employers will not pay the UI fund builder tax in 2016 because of the solvency of the UI trust fund. The Virginia Employment Commission estimates that, as a result of the elimination of the fund builder tax, employers across the state will save a total of $55 million next year, which is a savings of up to $240 on average for individual employers.
In addition, the pool tax, a second component of the UI employer tax structure, will be reduced from 0.14% to 0.07%. This will save the average employer a maximum of $84 next year resulting in an additional tax savings of $19.25 million across the state in 2016.
Speaking about today’s announcement, Gov. McAuliffe said, “I am thrilled to announce these additional tax savings for Virginia’s employers, which are a direct result of the progress we have made in building a new Virginia economy. When you are running a business, every dollar counts, and I am hopeful that this is just the beginning of the benefits Virginia companies, communities and families will derive from our ongoing efforts to grow and diversify our economy.”
The UI fund builder tax is designed to push solvency of the UI trust fund over 50 percent. It became effective in 2010 after the Great Recession. The pool tax is designed to recover benefit costs that cannot be assigned to an employer. It rose significantly after the Great Recession in 2010 to 0.28 percent from 0.08 percent.
“We are continuing to see the positive benefits from 18 consecutive months of year over year job growth in Virginia,” said Secretary of Commerce and Trade Maurice Jones. “We need to continue making investments and changes to support that growth, and these tax savings will result in even more new opportunities for Virginia employers and workers.”