October 26, 2021
Tennessee law will lower maximum weeks of unemployment insurance benefits available to claimants
Recently enacted Tennessee 2021 Public Chapter (Pub. Ch.) 560 (HB 1309) will, effective December 1, 2023, cap the total number of weeks an individual may collect unemployment insurance (UI) benefits at 20 weeks, down from the current 26 weeks.
Additionally, the number of UI benefit weeks available will vary from 12 to 20 weeks, depending on the state's average UI benefit rate as determined biannually. The biannual figure must be based on the seasonally adjusted UI rate as published by the US Department of Labor and cannot reduce or increase a claimant's maximum benefit eligibility once claimants establish their benefit year.
Beginning with claimant benefit years established on and after December 1, 2023, individuals will be eligible during their UI benefit year to 12 weeks of UI benefits if the state average UI benefit rate is at or below 5.5%. Additional weeks of UI benefits will be added for each 0.5% increment above the UI benefit rate of 5.5%. A maximum of 20 weeks of UI benefit weeks will be available when the average UI benefit rate reaches 9%.
The maximum weekly UI benefit amount will increase by $25-$50 by December 1, 2023, depending on the claimant's average wages paid during the highest two quarters of the claimant's base-year period. Currently, the maximum weekly benefit amount is $275.
Employer tax rate schedule remained the same beginning July 1, 2021
As we reported, according to the Tennessee Department of Labor & Workforce Development website, the employer state unemployment insurance (SUI) tax rate schedule continues to be the lowest possible for fiscal year 2022 (July 1, 2021 to June 30, 2022). Note, however, that the SUI tax rate schedule may change as of January 1, 2022, increasing SUI tax rates for the first and second quarters of 2022, if the level of the state's UI trust fund balance falls below $850 million as of December 31, 2021. (EY Tax Alert, 2021-1559, 8-24-2021.)
Because the SUI trust fund balance continued to exceed $850 million as of June 30, 2021, SUI tax rates for experience-rated employers will continue to range from 0.01% to 10.0% on Premium Rate Table 6 (though individual SUI tax rates increased or decreased as of July 1, 2021 because individual employer tax rate factors affect tax rates on a fiscal year basis).
Most new employers continue to pay at 2.7% for fiscal year 2022. The new employer rate for construction employers may be found on Form LB-0441, Report to determine status.
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