PROVIDENCE – The R.I. Department of Labor and Training will lower unemployment insurance tax rates next year, Gov. Gina M. Raimondo announced Wednesday.
The governor’s office said the reduction will save employers a combined $10 million annually.
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This is the second rate reduction of the unemployment tax since Raimondo took office. At the time of the first rate drop, the DLT said that if employment trends continued, it would reduce the rates again. The tax reduction last year was estimated to have saved Rhode Island employers $30 million annually.
The new lower schedule rates will begin Jan. 1, 2018.
The unemployment insurance tax rates – which had ranged from 0.99 percent to 9.59 percent – will now rage from 0.89 percent to 9.49 percent. The combined unemployment insurance tax reductions are expected to reduce the collected tax by $40 million annually going forward.
The unemployment insurance rate for new employers in 2018 will be 1.71 percent – which includes a 0.21 percent assessment to the Job Development Fund.
The 2018 taxable wage base will be $23,000 for most employers and $24,500 at its highest tax rate. The increase in the taxable bases both represent a $600 year-over-year increase. The unemployment taxable wage base is a law mandated 46.5 percent of the average annual wage in Rhode Island. The base is adjusted each year to account for inflation.
The unemployment insurance trust fund had a balance of $350 million in September.
“Our economy continued to strengthen this year because of investments we’ve made in job training and education, and next year, businesses will see another cut in their unemployment taxes,” said Raimondo in a statement. “This tax relief will help businesses, especially small- and medium-sized businesses, invest in new equipment, new training and new staff. It makes Rhode Island a more business-friendly state, and will help more Rhode Islanders get back to work.”
The DLT is expected to alert employers of their new unemployment insurance tax rates. More information may be found at www.dlt.ri.gov/ui/.
The DLT also announced Wednesday that the Temporary Disability Insurance taxable wage base – which is funded by employees – will be $69,300, which is an increase of $1,200 over the 2017 taxable wage base of $68,100. Employee contribution rate to the TDI fund will drop 0.01 percentage point to 1.1 percent in 2018. This is the first TDI tax rate decrease since 2012.
Chris Bergenheim is the PBN web editor.
