DLT sets UI taxable wage base for 2015

THE R.I. DEPARTMENT OF LABOR and training said that the 2015 unemployment insurance taxable wage base will be $21,200 for most employers in Rhode Island.
THE R.I. DEPARTMENT OF LABOR and training said that the 2015 unemployment insurance taxable wage base will be $21,200 for most employers in Rhode Island.

PROVIDENCE – The 2015 unemployment insurance taxable wage base will be $21,200 for most employers in Rhode Island, according to the R.I. Department of Labor and Training.

The taxable wage base represents a $600 increase from the current year. By law, the UI taxable wage base represents 46.5 percent of the average annual wage in Rhode Island, the state agency said on Friday.

Although the wage base limits the amount of wages that are taxable, tax rates for individual employers vary according to their experience with the UI system. These rates range from a minimum of 1.69 percent to a maximum of 9.79 percent. The lower an employer’s “experience rate,” the less tax the employer pays, the state agency said.

Employers will be notified of their new individual tax rates in December. The 2015 rate for new employers will be 2.74 percent, a decrease of eleven-tenths of a percentage point from the 2014 rate.

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The 2015 taxable wage base for those employers in the highest UI tax rate (9.79 percent) group will be $22,700, which is $1,500 greater than the taxable wage base for all other employers, per state law. This higher wage base, which affects approximately 16 percent of Rhode Island experience-rated employers, is intended to help offset the large drain these employers have on the employment security trust fund.

Last year, 38.4 percent of all UI benefit payments were attributed to the top 16 percent of Rhode Island experience-rated employers.

The employment security trust fund, financed by assessments from 30,924 businesses in the state, covers the cost of unemployment insurance benefits for Rhode Island workers. The fund’s taxable wage base represents the maximum amount of an employee’s earned wages subject to taxation in any given year.

DLT also said that the employee contribution rate to the temporary disability insurance (TDI) fund will remain at 1.2 percent in 2015. The TDI contribution rate has remained unchanged since 2012. The contribution rate is calculated by dividing total adjusted fund disbursements for a 12-month period by taxable wages for a 12-month period.
Also in 2015, the TDI taxable wage base will be $64,200, an increase of $1,500 over last year’s taxable wage base. The maximum TDI contribution will be $770.40 next year, an increase of $18 from the 2014 maximum contribution of $752.40.

TDI provides benefit payments to insured Rhode Island workers for weeks of unemployment caused by disability. Last year, approximately 403,300 workers contributed to the TDI fund. Rhode Island workers, not employers, fund the TDI system.
On July 11, 2013, Rhode Island signed into law the temporary caregivers insurance (TCI) program, which can provide eligible claimants with up to four weeks of caregiver benefits to care for a seriously ill child, spouse, domestic partner, parent, parent-in-law or grandparent or to bond with a newborn child, new adopted child or new foster-care child. Through the second quarter of 2014, TCI claims accounted for about 10 percent of the total number of initial TDI applications filed with DLT.

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