Employers could see significant increases to unemployment insurance in 2021
The average employer paying into Kentucky’s Unemployment Insurance (UI) trust fund is expected to pay an additional $100 per-employee in taxes for 2021, according to an estimate prepared for the Kentucky Chamber of Commerce.
The analysis comes after Kentucky’s UI Trust Fund dwindled to $0 with the rise of unemployment claims filed at the height of the COVID-19 pandemic, causing the administration of Gov. Andy Beshear to obtain a federal loan of approximately $865 million to ensure payments to Kentuckians would continue.
Since then, Gov. Beshear announced that between $200-$330 million in CARES Act funding would be dedicated to help paying down the loan, with the rest of the burden falling directly on Kentucky employers.
Employers such as nonprofit organizations that reimburse the state for actual charges may also see significant unemployment insurance cost increases if they were forced to lay off employees last year as a result of the pandemic.
“The business community stepped up to limit the spread of the virus and ensure the safety of employees and customers during the pandemic. We are committed to helping those businesses that have made sacrifices, which is why finding relief for employers facing these unemployment insurance increases is a top priority of the Kentucky Chamber in 2021,” said Kate Shanks, VP of Public Affairs at the Kentucky Chamber of Commerce.