State announces jump in unemployment premiums

Wednesday, Nov. 17, 2004 | 10:57 a.m.

CARSON CITY -- Nevada businesses face a 7-percent jump in their average unemployment insurance premiums after state officials announced new, higher rates Tuesday.

Starting in January, some 28,000 businesses in Nevada will have their unemployment insurance premiums raised or lowered.

Cindy Jones, director of the state Division of Employment Security, Tuesday officially raised the average premium paid from 1.29 percent of the average annual wage to 1.38 percent.

The move is needed to keep the unemployment fund solvent in the next year, officials say. The fund pays out benefits to unemployed workers.

There were no protests from employers on Tuesday or at a Nov. 6 public hearing. Despite the average increase, some businesses will see lower rates because on a low employee turnover rate. Others will see their rate increase.

A department spokeswoman said employers will be notified next month of their new rate -- and that is when the complaints usually start coming in.

The average tax rate for employers has remained at 1.29 percent of the average wage of a worker for four years. That rate is increased by 0.05 percent to finance an employment training program so the total paid by an employer is an average of 1.34 percent.

This year the employer has been paying the 1.34 percent for each worker, based on an average wage of $22,000 and expected to rise to $22,900 next year.

The rates range from 0.25 percent for the businesses with the least turnover to 5.4 percent for those employers with the highest. The department said that 43.6 percent or 12,116 employers are expected to be in the lowest rate next year and 939 businesses will be at the top end.

New businesses must pay a 2.9 percent rate for their first three and one half to four years before they gain an experience rating and qualify for a lower tax. There are an estimated 22,900 businesses in the new category.

Jones said the increase would allow the trust fund to build reserves during economic expansion and keep the tax stable during downturns. The fund is measured yearly on Sept. 30 to determine if it has enough money to pay unemployment benefits to the jobless.

Last September, there was $439.2 million in the fund, $37.3 million more than the required solvency test. The department estimates there will be an ending balance next September of $455.7 million, which would be about $38.3 million higher than required.

Weekly unemployment benefits range from $16 to a high of $329. The average check is $243 a week.