The RI Department of Labor and Training announces Unemployment Insurance and TDI Tax rates for 2012

The RI Department of Labor and Training has announced  that the 2012 Unemployment Insurance taxable wage base will be $19,600 for most employers in Rhode Island. This represents a $600 increase from the current year. By law, the Unemployment Insurance taxable wage base represents 46.5 percent of the average annual wage in Rhode Island.
 
While the wage base limits the amount of wages that are taxable, tax rates for individual employers vary according to their experience with the Unemployment Insurance system. These rates range from a minimum of 1.69 percent to a maximum of 9.79 percent. Employers will be notified of their new individual tax rates in December. The 2012 rate for new employers will be 2.64 percent in 2012, an increase of 0.18 of a percentage point from the 2011 rate for new employers.
 
The 2012 taxable wage base for those employers in the highest Unemployment Insurance tax rate (9.79%) group will be $21,100-$1,500 greater than the taxable wage base for all other employers, per RI law. This higher wage base, which impacts approximately 19 percent of RI experience-rated employers, is intended to help offset the large drain these employers have on the Employment Security Trust Fund. Last year, 44.5 percent of all Unemployment Insurance benefit payments were attributed to the top 19 percent of RI experience-rated employers.
 
The tying of the taxable wage base to the average annual RI wage and the increasing of the wage base for employers in the highest tax rate are the result of recent legislative action to help restore solvency to the RI Employment Security Trust Fund.
 
The Employment Security Fund, financed by assessments from 30,600 private businesses in the state, covers the cost of Unemployment Insurance benefits for RI workers. The fund's taxable wage base represents the maximum amount of an employee's earned wages that are subject to taxation in any given year. 
 
The Department also announced that the employee contribution rate to the Temporary Disability Insurance Fund will drop to 1.2 percent in 2012, a 1/10th of a percentage point decrease from 2011. The contribution rate is calculated by dividing total adjusted fund disbursements for a 12-month period by taxable wages for a 12-month period.
 
Also in 2012, the TDI taxable wage base will be $60,000, an increase of $1,600 over last year's taxable wage base. The maximum TDI contribution will be $720.00 next year, a decrease of $39.20 from the 2011 maximum contribution of $759.20.

Temporary Disability Insurance provides benefit payments to insured RI workers for weeks of unemployment caused by disability. Last year, approximately 391,500 workers contributed to the TDI fund.
 
As always, should you have any questions, please feel free to contact your trusted advisor at DiSanto Priest & Co. 

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