Florida’s reemployment tax rate is set to increase in 2021, according to the Florida Chamber of Commerce.
In a press release this week, the business advocacy group reported that job creators in the Sunshine State will see an increase in unemployment costs. According to the group, employers that are at the minimum rate for unemployment will see a tax increase of $13.30 per employee. The increase will result in businesses paying $20.30 per employee in 2021 compared to $7 an employee in 2020.
Other employers with variable rates will also see increases in 2021 unless they are at the maximum rate of 5.4 percent.
“The unemployment tax increase comes on the heels of what has already been a difficult year for business owners due to the pandemic, said Carolyn Johnson, Director of Business, Economic Development & Innovation Policy at the Florida Chamber. “While not as significant of an increase as businesses faced during the Great Recession, we are concerned that with businesses already struggling this could be a significant burden.”
The Florida Department of Revenue will increase the minimum tax rate from 0.10 percent to 0.29 percent as businesses continue to face challenges brought forth by the pandemic. The Chamber says that the increase is due to socialized costs, such as the non-charge ratio and a fund size adjustment ratio to replenish the trust fund. The maximum rate, set in statute, will remain at 5.4 percent, while the taxable wage base remains at $7,000, or $378 per employee for 2021.
Johnson says the increase will be closely monitored by industry leaders and officials heading into the 2021 Legislative Session.
“As businesses get their 2021 tax bills, the Florida Chamber is forming a working group of our members to examine the unemployment compensation system and determine what legislative actions are necessary, if any,” she continued. “In previous years, the legislature has acted to help replenish the trust fund or to lessen the burden of unemployment taxes and the Florida Chamber stands ready through our working group to provide input.”
The rate hike comes as the Florida Department of Economic Opportunity (DEO) paid than 2 million claimants nearly $19 million since the start of the COVID-19. Nearly 4.5 million unique claims have been processed, representing 99 percent of unique claims submitted.
The DEO recently reported that 659,000 Floridians remain jobless in the state (out of a labor force of 10,109,000), with the state’s unemployment rate nearing 7 percent in the latest report from October.