Kentucky Governor Andy Beshear (D) signed House Bill 144 into law on March 24, freezing the state’s unemployment insurance tax rate at 2020 pre-pandemic levels for 2022. The Kentucky Chamber of Commerce estimated businesses would have paid about $70 more in taxes per employee if the tax rate had unfrozen. Kentucky’s unemployment insurance tax rate is normally tied to the solvency of the state’s unemployment trust fund. Due to increased unemployment insurance fillings during the COVID-19 pandemic, the trust fund was depleted, which would have triggered higher unemployment insurance taxes without the bill.
Employers pay state unemployment taxes to fund the unemployment insurance program. Each state sets its own tax rate range, wage base (the amount of pay an employer needs to pay taxes on for each employee), and experience rating system.
Employers also pay federal unemployment taxes under the Federal Unemployment Tax Act (FUTA).
Unemployment insurance is a joint federal and state program that provides temporary monetary benefits to eligible laid-off workers who are actively seeking new employment. Qualifying individuals receive unemployment compensation as a percentage of their lost wages in the form of weekly cash benefits while they search for new employment.
The federal government oversees the general administration of state unemployment insurance programs. The states control the specific features of their unemployment insurance programs, such as eligibility requirements and length of benefits.
For more information on Kentucky’s unemployment insurance program, click here. For information about unemployment insurance programs across the country, click here.
Additional reading:
- Unemployment insurance
- Unemployment insurance in Kentucky
- Unemployment insurance fraud in Kentucky
- History of unemployment insurance fraud in Kentucky
