State Sen. Nancy Detert and state Rep. Doug Holder, who represent each other, carried a set of changes to Florida’s unemployment compensation system through the Legislature this year, and had good things to say about the new law after Gov. Rick Scott signed it last week.
As the two Republicans told their hometown paper, the Sarasota Herald-Tribune, “the legislation is a key piece to the state Legislature’s pledge to reduce regulations and taxes on small businesses. [Detert] said small businesses have been getting hit with higher and higher unemployment taxes to pay for all the unemployed, even when people are fired for good cause”:
Some businesses are not hiring new workers because of the cost of the unemployment taxes, Detert said.
“It really turned out to be a job tax that doesn’t help anyone,” said Detert, who sponsored the legislation in the Senate.
So how much will employers save on the “job tax?” It may be difficult to measure the full set of savings employers will receive under the wide-ranging set of changes, but legislative staffers have analyzed the new law’s effects on the minimum unemployment taxes companies will pay.
High unemployment has drained the state’s unemployment compensation fund, and the levies on companies are now rising to pay back the federal government, which loaned the state money to help keep the state’s system afloat. According to an analysis by legislative staff, the minimum payment per employee would have gone up from $72.10 to $206.55 this year to next if not for the new law. Now, the minimum payments will only rise to $174.25, meaning companies paying the minimum rate will save $32.30 per employee next year.
After that, assuming the state avoids another recession, rates will start falling again, and the savings resulting from the new law will diminish in the following years, as summed up in these tables:
These numbers, and others that show the effects on the state’s unemployment trust fund, can be found on page 14 of this legislative analysis (.pdf). Another table shows that the amount of unemployment benefits paid to Floridians is expected to decline (driven in part by falling unemployment), and the new law will cause that total amount to decline more quickly.
The law makes other changes that could benefit employers besides reducing the number of weeks benefits are available and the amount of taxes companies will have to pay. For example, Employees could be found guilty of misconduct they commit away from the workplace. The fewer workers are able to claim benefits, the greater the likelihood their employer will be able to continue paying the minimum rate, as their payments can rise if more of their former workers are able to claim benefits.