Log in

Utah's Unemployment Insurance Program a Nationally-Recognized Example of State Innovation


The U.S. Department of Labor recently released their April-June 2016 quarterly report on the status of the Unemployment Insurance (UI) program.

Congress designed the program as a federal-state partnership. The federal government provides over-arching support to help ensure conformity and compliance within the framework of federal law. Because of Utah employer’s compliance with federal law, they experience a 90 percent credit towards their federal unemployment tax — the difference between paying $420 per employee to $42 per employee each year.

States are provided with the latitude to adopt their own laws towards accomplishing the goals of the program, tailored towards their unique economic and geographic landscapes. This ensures that the voice of local employers — who fundamentally support the UI program structure — is heard. This also provides states with the agility to address changes in the dynamics of local labor markets.

This federal-state partnership results in 53 different variations of UI being administered across the country; of which, Utah continues to be a leader.



EMPLOYER RATES

Thanks to the effective management of our state legislature and the growing economy, Utah’s trust fund balance is currently the fourth healthiest in the nation.

Looking back at the most recent recession, Utah was one of only 15 states that did not have to borrow money to pay for benefits during that time. In contrast, with the Department of Labor’s most recent quarterly summary, there are nine states who are still considered insolvent and 26 who are below what the Department of Labor considers to be “minimally solvent.”

Due to effective management of our fund and in contrast with many other states, Utah businesses will pay less in taxes in 2016 compared to the prior year. Additionally, Utah is prepared for the future with a robust fund. Employer 2017 rates are currently being calculated and will be mailed out at the beginning of December.

 

RE-EMPLOYMENT

Because employers are hiring Utah’s skilled workforce, we continue to rank in the top 10 states for lower durations of receiving unemployment benefits and lower rates of individuals exhausting their full amount of benefits.

Historically, most states have offered up to 26 weeks of benefits. Some states have decreased that amount to address solvency issues with their trust fund. Utah has not changed the current eligibility parameter and qualified individuals may receive between 10 and 26 weeks of benefits based on prior wage history. Even with that, only 26 percent of individuals actually exhaust their full benefit amount in Utah (compared to the national average of 37 percent).

We continue to look for meaningful ways that support that transition back into employment. We are currently running a few re-employment pilot programs focused on holding individuals accountable for their work search and facilitating that connection with employers who are hiring.

 

UTAH HIGHLIGHTS

In September, Utah was invited to testify before Congress about innovative approaches to strengthening UI to serve the unemployed today and in the future. We provided an example of a state that’s “gotten it right.”

In October, Utah was recognized as being the top-performing medium-sized state in the country — across the board  for an unprecedented fifth year by the Department of Labor. This is the culmination of seven consecutive years of high performance in determining eligibility for benefits, six consecutive years in assessing employer liability, and eight of the last nine years in processing appeal requests. Our staff function with the mantra of “quality and timeliness” in everything we do.

Utah currently has 77K active employers who have employed 1.3 million individuals with the safety net of unemployment insurance. When unemployment does happen, we’re here to support the employers and employees of the Beehive State.