12 December 2019 South Carolina 2020 SUI tax rates to decrease due to elimination of the variable solvency surcharge, wage base unchanged South Carolina Governor McMaster and the Department of Employment and Workforce announced that state unemployment insurance (SUI) tax rates will decrease in 2020 due to the elimination of the variable solvency surcharge that was added to employer tax rates for several years. This is the seventh consecutive year of rate reductions. For 2020, SUI tax rates are reduced from the 2019 rates by an average of 34%, the largest decrease so far, saving an estimated $68 million for the year. According to the announcement, the UI trust fund is now at a level sufficient to withstand a recession equivalent to the average of the last three recessions. The solvency of the trust fund means the elimination of all solvency surcharges for the first time since 2003, including those to repay the 2008–2011 federal loan as well as the five-year rebuild of the state's UI trust fund, which was depleted during the economic turndown. "Balancing the requirement to maintain a fiscal safety net while cutting business taxes each year shows that South Carolina is dedicated to making it appealing for companies to do business here so they will continue to create jobs and invest in South Carolinians by expanding opportunities," said Gov. Henry McMaster. "The 2020 savings are a direct result of the growing economy and the support of South Carolina's business community." The 2020 SUI tax rates will range from 0.06% to 5.46%, including the additional 0.06% contingency surcharge.Within the rate schedule, employer tax rates decreased between 0.062% and 1.191% due to the elimination of the solvency surcharge.(South Carolina Department of Employment and Workforce website.) New employers will pay at 0.55% for 2020, including the 0.06% contingency surcharge, down from 0.87% for 2019. For more information on the 2019 SUI tax rates, go to the Department's website. The 2020 SUI tax rate notices were mailed to employers on November 8, 2019 and are also available electronically through the employer's State Unemployment Insurance Tax System (SUITS) account. As we previously reported, South Carolina UI law Section 41-31-45 required that the Department establish a "solvency surcharge" to take effect once the state repaid its federal UI loan balance in full. As the Department repaid the federal loan in mid-2015, the surcharge was effective with calendar year 2016. The purpose of the surcharge is to rebuild the state's UI trust fund balance to a "fund adequacy target" level recommended by the US Department of Labor using a standard referred to as the "average high cost multiple (AHCM)." The Department's goal is to rebuild the UI trust fund to an adequate level by 2020. Employers receive credit to their SUI accounts for the solvency surcharge. (South Carolina UI Regulations Sections 47-500 and 47-501.)
Document ID: 2019-2183 | |||||||||
