11 December 2018 A preliminary look at state unemployment insurance wage bases for 2019 State unemployment insurance (SUI or UI) trust funds are largely financed by employer contributions (except in Alaska, New Jersey and Pennsylvania, where employees also make contributions). States are required to maintain an SUI wage base of no less than the limit set under FUTA. The 2019 FUTA wage base of $7,000 has remained unchanged since 1983, despite increases in the federal minimum wage and annual cost-of-living adjustments over the last 35 years. Some states are conservative in their approach to maintaining adequate UI trust fund reserves. Consequently, the UI wage base is flexible, meaning it is indexed to the average wage or varies based on the trust fund balance. According to the DOL, 23 states and the Virgin Islands had a flexible wage base in 2017. Conversely, in 2018, the wage base was fixed in 28 states and Puerto Rico. (US Department of Labor, Comparison of State Unemployment Laws, 2018.) The recent strain on UI trust fund reserves sparked numerous state wage base changes. As a result, only three jurisdictions continue to have a fixed wage base of $7,000 (Arizona, California and Puerto Rico, though Puerto Rico passed legislation that allows the taxable wage base to increase to as much as $10,500), compared to seven in 2010 (although in Louisiana and Tennessee the taxable wage base can decrease to $7,000 when the trust fund reaches a certain level, and in Florida the taxable wage base reverted to $7,000 beginning in 2015). The attachment below has a preliminary list of the 2019 state unemployment insurance (SUI) taxable wage bases (as compared to 2018) and employee SUI withholding rates, if applicable.
Document ID: 2018-2456 | |||||||||
