House Committee Moves Chamber-Supported Legislation to Provide Stability in Unemployment Insurance Tax Bills

December 7, 2015

Chamber-supported legislation is on the move to make quarterly unemployment insurance (UI) tax bills more predictable for employers. The legislation passed the House Workforce and Talent Committee last week and we hope to have it to the Governor’s desk by the end of the year. 

Under legislation passed in 2011, a UI tax reduction went into effect during the 3rd quarter wage reports (filed by Oct 25). This means non-delinquent employers will pay UI taxes based on a taxable wage base (TWB) of $9,000, down from $9,500. This is because the 2011 legislation specifies that when the UI Trust Fund (the fund that pays UI claimants) balance reaches $2.5 billion, the TWB would be reduced. The TWB is the annual amount of wages paid by an employer to an employee that are subject to state UI taxes. To determine an employer’s yearly unemployment tax, the wages of each covered worker (up to the TWB) is multiplied by the employer’s annual (experience rated) tax rate. 

Senate Bill 500, sponsored by Sen. Horn (R-Frankenmuth), ensures that MI employers will stay at a $9,000 TWB through the end of 2016, if not beyond. This fix to the 2011 law would require the Unemployment Insurance Agency (UIA) to determine by June 30 of each year whether the Trust Fund has at least a $2.5 million balance and is expected to stay at that level for the succeeding calendar quarter. If it meets this threshold, the TWB would be $9,000 in the next calendar year. It if does not, the TWB would be $9,500. Without this change, employers would see a quarterly fluctuation in their UI rates, creating issues for budgeting and an administrative hassle.

We remain hopeful that this legislation will be sent to the Governor’s desk by the end of the year.

For more information, please contact Wendy Block, Director of Health Policy & Human Resources, at (517) 371-7678 or