Recently enacted legislation (HB 198) freezes the Delaware state unemployment insurance (SUI) taxable wage base at the current $16,500 for 2020 (under the bill language from July 1, 2019 to October 29, 2020) so the Division of Unemployment Insurance and the Unemployment Compensation Advisory Council may determine whether the formula used to calculate the annual figure should be revised.

The Act also increases the maximum weekly UI benefit amount from $330 to $400, effective for benefit years beginning June 30, 2019.

2013 legislation increased SUI taxable wage base

As we reported, legislation enacted in 2013 changed the determination of the SUI taxable wage base from a set amount of $10,500 to a range of $10,500 to $18,500, beginning calendar year 2014, by tying the wage limit and the special training tax assessment to the balance of the state's unemployment trust fund — the higher the trust fund balance, the lower the taxable wage base and the higher the assessment. (HB 168, signed by the governor on August 15, 2013; EY Payroll Newsflash Vol. 18, #196, 11-20-2017.)

The state's UI law provides for the following:?

• If the UI Trust Fund balance is $125 million or less as of September 30 of the preceding year, the taxable wage base will be $18,500 and the assessment 0.085%.
• If the trust fund is greater than $125 million, but less than $175 million, the taxable wage base will be $16,500 and the assessment 0.095%.
• If the trust fund balance is at least $175 million, but not greater than $225 million, the taxable wage base will be $14,500 and the assessment 0.11%.
• If the trust fund balance is greater than $225 million, but less than $275 million, the taxable wage base will be $12,500 and the assessment 0.126%.
• If the UI Trust Fund balance is $275 million or greater, the taxable wage base will be $10,500 and the assessment 0.15%.

According to the bill's fiscal note, the Division projects an unemployment trust fund balance of $173.5 million as of September 30, 2019, which would have resulted in a taxable wage base of $16,500.

The SUI tax rates are typically issued in mid-December. For more information on SUI taxes in Delaware, see the Department's employer handbook.

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EY Payroll News Flash