Employment Security Division administrator Kimberly Gaa on Thursday formally approved the Unemployment Insurance tax rate for 2020.
The rate effective Jan. 1 is 1.65 percent of wages paid to employees. That is two-tenths of a percent lower than the current rate, giving a significant break to businesses that pay the tax.
While two-tenths doesn’t sound like much, it will cut the total the more than 79,000 Nevada businesses must pay by $73 million.
Despite the reduction, analysts advised the Employment Security Council in October that the Unemployment Insurance Trust Fund will continue to grow in 2020 unless a serious recession hits. The council, which recommends where the administrator should set rates each year, was told the fund is now over $1.8 billion, enough to pay unemployment checks for 18 months in a recession.
The 1.65 percent rate is an average of what 18 different classes of business pay based on their employee turnover. Different businesses pay anywhere from a quarter percent for the businesses with the lowest turnover rate among employees to 5.4 percent for those businesses with the highest turnover.
There are 7,531 businesses at the lowest rate and 2,340 at the top rate in the 52,363 businesses on the rate schedule.
There are another 26,991 new Nevada businesses that are not yet rated. New businesses are set at an arbitrary 2.95 percent until the state has two to three years of experience with each employer to fairly rate them.
In addition to the percentages on the rate schedule, the state collects a half percent from each business to support the Career Enhancement Program. That sets the total average rate businesses must pay to support unemployment payments at 1.7 percent.
-->Employment Security Division administrator Kimberly Gaa on Thursday formally approved the Unemployment Insurance tax rate for 2020.
The rate effective Jan. 1 is 1.65 percent of wages paid to employees. That is two-tenths of a percent lower than the current rate, giving a significant break to businesses that pay the tax.
While two-tenths doesn’t sound like much, it will cut the total the more than 79,000 Nevada businesses must pay by $73 million.
Despite the reduction, analysts advised the Employment Security Council in October that the Unemployment Insurance Trust Fund will continue to grow in 2020 unless a serious recession hits. The council, which recommends where the administrator should set rates each year, was told the fund is now over $1.8 billion, enough to pay unemployment checks for 18 months in a recession.
The 1.65 percent rate is an average of what 18 different classes of business pay based on their employee turnover. Different businesses pay anywhere from a quarter percent for the businesses with the lowest turnover rate among employees to 5.4 percent for those businesses with the highest turnover.
There are 7,531 businesses at the lowest rate and 2,340 at the top rate in the 52,363 businesses on the rate schedule.
There are another 26,991 new Nevada businesses that are not yet rated. New businesses are set at an arbitrary 2.95 percent until the state has two to three years of experience with each employer to fairly rate them.
In addition to the percentages on the rate schedule, the state collects a half percent from each business to support the Career Enhancement Program. That sets the total average rate businesses must pay to support unemployment payments at 1.7 percent.