BATON ROUGE – Louisiana Workforce Commission Executive Director Tim Barfield sent a letter Friday to U.S. Department of Labor Secretary Hilda L. Solis seeking written clarification on the effect an expansion in benefits would have on Unemployment Insurance taxes paid by Louisiana businesses.
The LWC received verbal instructions last week from high-level USDOL staff in Washington, D.C., indicating that expanded benefits paid as a result of using an alternate base period to determine eligibility must be considered as part of an employer’s experience rating. The experience rating is a factor in determining the employer’s UI tax rate.
According to that guidance, Louisiana would have to increase state unemployment taxes on the Louisiana businesses that lay off people who qualify for benefits under the alternate base period, regardless of whether the stimulus money had been spent. Louisiana would receive $32.8 million of stimulus money if it were to change the law to enact an alternate base period.
Louisiana and most other states use the first four of the most recently completed five calendar quarters when determining eligibility for unemployment benefits. The alternate base period, proposed in the stimulus package, would require the state to use the most recently completed four calendar quarters to try to qualify people who fail to qualify under the existing base period.
In the letter, Barfield asks Solis for written guidance on the issue and for consideration of any accommodations that can be made to avoid passing along direct tax increases to businesses.
A copy of the letter is available here.
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