Arguing that current extreme circumstances due to the pandemic warrant it, one of the state’s leading small business organizations is asking that an upcoming Unemployment Insurance tax hike on Michigan’s employers be suspended. If such action isn’t undertaken, the tax would automatically go into effect near year.
This morning the National Federation of Independent Business (NFIB), urged the House Commerce and Tourism Committee to report out legislation that would suspend that upcoming tax hike on employers, reminding them that the tax will automatically go into effect next year unless the legislature acts to change the current law.
Included in the Unemployment Insurance reforms adopted during the Snyder administration was a trigger that would increase the maximum taxable wage base of every employee from $9,000 to $9,500 in the next calendar year following the Unemployment Insurance Trust Fund dropping below $2.5 billion. Unemployment Insurance payroll taxes are calculated on an employer’s tax rate multiplied times the wage base. The $500 increase per employee on payroll would result in a hefty tax hike for employers already struggling with the fallout from the COVID-19 pandemic. Because of the impact of the surge in unemployment claims, the trust fund will drop below the $2.5 billion trigger.
House Bill 6136 would suspend the automatic tax increase anytime there is a declared state of emergency that requires any an employer to close or limit its business operations for any period.
NFIB Assistant State Director Amanda Fisher contends, “Suspending the tax increase would be consistent with current Executive Orders that do not charge an employer’s account for unemployment claims resulting from COVID-19 impacts,” and concludes, “The original trigger language never contemplated these extreme circumstances that employers find themselves in through no fault of their own.”
Fisher urged the committee to report out the bill to the House floor for quick action during the remaining weeks of the September session.
For more than 75 years, NFIB has been advocating on behalf of America’s small and independent business owners, both in Washington, D.C., and in all 50 state capitals. NFIB is nonprofit, nonpartisan, and member-driven. Since being founded in 1943, NFIB has been exclusively dedicated to small and independent businesses, and remains so today. For more information, you can visit online at nfib.com.
