Plummeting unemployment insurance funds and rising state debt will likely trigger a “solvency tax” on many Michigan employers beginning in January, the Michigan Unemployment Insurance Agency (UIA) said.
The state owes $376 million of the $1 billion it had borrowed from the U.S. Department of Labor to cover unemployment payments since 2006.
The debts triggered a state law requiring “negative-balance” employers to pay a quarterly tax of up to $67.50 per employee. Negative-balance employers are those whose workers have drawn more in unemployment benefits than the employer has paid into the system.
Roughly 34,000 employers, or 15% of all employers in the state, will owe the tax, according to Norm Isolato, Michigan UIA spokesman. In addition, all employers in the state will probably see an increase of $21 per employee per quarter beginning in January 2010, Isolato said.