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North Dakota Governor Doug Burgum recently issued Executive Order 2021-09, which rescinds the state of emergency and the provisions of Executive Order 2020-08.3 that continued the non-charge of COVID-19 unemployment insurance (UI) benefits into 2021. As a result of Executive Order 2021-09, and as confirmed by the Job Service North Dakota, employers are charged with COVID-19 UI benefits starting May 1, 2021. (Department's email response to inquiry, 5-18-2021.)

Employer accounts were not charged with COVID-19 UI benefits during 2020 and through April 30, 2021. As a result, these UI benefit charges were not used in the computation of the 2021 employer state unemployment insurance (SUI) tax rates. (EY Tax Alert 2020-1123, 4-22-2020;Executive Order 2020-08.)

Note that at the time of this Alert, the state's COVID-19 response website and the Department's COVID-19 FAQs website continue to say that employers are not charged for COVID-19 UI benefits.

2021 SUI tax rate range remains the same as for 2020

The 2021 North Dakota state unemployment insurance (SUI) tax rates continue to range from 0.08% to 9.69% due to a transfer of CARES Act funds to the state's UI trust fund. (2021 unemployment insurance tax rate schedules, Job Service North Dakota.)

New non-construction, positive-balanced employers pay at 1.02% for 2021 and negative-balanced, non-construction new employers pay at 6.09%. New construction employers pay at 9.69%.

2021 SUI wage base

The SUI taxable wage base for 2021 is $38,500, up from $37,900 for 2020. The taxable wage base is set each year at 70% of a statewide average wage.

Transfer of CARES Act funds to state UI trust fund kept 2021 range of rates the same as for 2020

The North Dakota Emergency Commission announced that an additional $100 million of CARES Act funding was allocated to the state's UI trust fund, bringing the total allocated to $410 million (though $50 million of the UI funds has since been reallocated).The allocations were intended to maintain the solvency of the UI trust fund and restore the fund to pre-pandemic levels, minimizing the impact of COVID-19 UI benefits on employer SUI tax rates for 2021 and beyond.

Penalty rates for employers that are delinquent in filing SUI taxes

Employers delinquent in the filing of SUI returns may have had a special tax rate assigned, as follows:

• Experience-rated negative employers, new positive construction employers, and new negative employers must be assigned the negative employer maximum rate (9.69% for 2021)
• Experience-rated positive employers and new positive non-construction employers must be assigned the negative employer minimum rate (6.09% for 2021)

The Past Due Report Notice for the third quarter of the year, which is mailed to delinquent employers via certified mail, notifies employers of the quarters for which a report has not been received and that unless the employer files the delinquent report(s) within 15 days after the mailing of the past due report notice, the employer's rate for the upcoming year must be set as shown above. (Employer handbook, page 20.)

2021 rate notices

The Department mailed the 2021 tax rate notices to employers on December 8, 2020.

For more on North Dakota SUI taxes, see the agency's website.

North Dakota will opt out of federal COVID-19 UI benefit programs in June 2021

North Dakota Governor Doug Burgumannounced that the state will end participation in federal pandemic-related UI benefit programs on June 19, 2021, and return to its pre-pandemic UI benefit program. North Dakota is one of 20 states that so far have decided to opt out of the federally funded COVID-19 UI programs, citing a workforce shortage now that the state's businesses are reopening.

As a result, the following federal UI benefits will no longer be available:

• Federal Pandemic Unemployment Compensation (FPUC), which provides for an additional $300 weekly payment to recipients of unemployment compensation
• Pandemic Unemployment Assistance (PUA), which provides benefits for those who would not usually qualify, such as the self-employed, gig workers, and part-time workers
• Pandemic Emergency Unemployment Compensation (PEUC), which provides for an extension of benefits once regular benefits have been exhausted
• Mixed Earner Unemployment Compensation (MEUC), which provides an additional $100 benefit to certain people with mixed earnings

Ernst & Young LLP insights

According to the federal Treasury Direct website, as of June 22, 2021, North Dakota has not yet requested the option, if needed, to receive federal UI Title XII advances (UI loans).

For more information on the Job Service North Dakota response to COVID-19, see this website.

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