BATON ROUGE – When the Revenue Estimating Conference (REC) meets on Thursday to review the Louisiana Unemployment Insurance Trust Fund, it will find a fund ranked as one of the strongest in the nation, backed by an agency with one of the lowest unemployment insurance tax rates on businesses in the country.
The Louisiana Workforce Commission holds the fifth-lowest rate in the nation for the lowest average unemployment tax rate paid by businesses on total wages, according to the U.S. Department of Labor (USDOL).
Louisiana businesses also take advantage of the second-lowest taxable wage base in the country for unemployment taxes.
These taxes go into the state’s Unemployment Insurance Trust Fund, which the USDOL ranked as the 12th strongest in the country. Wyoming has the strongest trust fund in the country based on a USDOL formula that looks at a fund’s benefit-paying longevity should fund contributions abruptly cease. The total balance in a state’s trust fund is not factored into rankings.
“We focus on being good stewards of the Unemployment Insurance Trust Fund,” said Louisiana Workforce Commission Executive Director Ava Dejoie. “Individuals in job transition who rely on benefits from the fund, as well as the Louisiana businesses that pay into the fund, deserve nothing less.”
As of September 18, the state’s unemployment trust fund had a healthy balance of $928,020,136. Because of the fund’s strength, no changes are planned to the current level of unemployment benefits, and no increase is anticipated to the wage base per employee that employers pay in unemployment taxes.
The trust fund’s strength also means the state’s Incumbent Worker Training Program (IWTP) will continue to be funded at the same level. The IWTP provides funds to businesses offering training to their employees seeking advancement.
While an employee’s wages are used to determine the amount of unemployment taxes to be paid, workers never pay into the unemployment trust fund, Dejoie noted. Contributions to the trust fund are paid by employers, not through deductions from employee pay.
Despite its low unemployment tax rate on total wages and taxable wage base, Louisiana has been able to maintain a strong trust fund balance because of a variety of efforts by the Louisiana Workforce Commission, such as:
Last year, the LWC held more than 1,300 employment events across the state, with another 700 held so far this year.
Re-employment sessions are held weekly at LWC Business and Career Solutions Centers throughout the state, with trained staff working directly with unemployed individuals to assess their job skills and provide tools to help them gain employment.
The LWC has been educating employers and job seekers on ways they can prevent improper unemployment payments, thereby ensuring benefit payments from the trust fund are accurate.
The LWC has also enhanced its efforts to detect and collect unemployment benefit overpayments from individuals.
The agency is partnering with the Louisiana Department of Revenue, the Internal Revenue Service and USDOL’s Wage and Hour Division to crack down on businesses that purposefully misclassify employees in order to prevent paying unemployment taxes and other wage-related taxes and employee benefits.
“We want to make sure that our trust fund not only maintains its strong standing, but that it is managed responsibly,” said Dejoie. “We will continue to protect and bolster the trust fund by doing all we can to help individuals get back into the workforce, having unemployment payments go only to those who truly qualify, and working toward a fair playing field for businesses in Louisiana.”
About the Louisiana Workforce Commission
The Louisiana Workforce Commission is an agency of state government that administers programs designed to enhance workforce growth and provide family-sustaining jobs for Louisiana residents. The commission monitors employment, administers unemployment compensation and tax funds, provides training resources for employers and employees and oversees worker compensation benefits. The agency also gathers and supplies information on the labor market and occupational sectors in Louisiana.
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