Savings Will Help Businesses Work Through Tough Economy
TRENTON – Legislation sponsored by Senate Labor Committee Chairman Fred Madden (D-Gloucester/Camden) to cut the unemployment insurance tax rates that will be imposed on employers during the upcoming fiscal year, which would help businesses in New Jersey work through the difficult economy and save or add jobs, was approved today by the committee.
“These savings are critical to helping small businesses remain afloat in this difficult economy,” said Senator Madden. “This tax break will help them retain and add employees at a time when we should be doing all we can to help spur job-creation and economic growth. This is a commonsense bill that helps employers and workers alike.”
The measure (S-2404) would suspend the 10 percent unemployment surcharge scheduled to take effect for FY 2014, giving employers an estimated savings of $293 million. Similar actions for FY 2013 and FY 2012 produced savings as well. Senator Madden said the three-year total savings could be close to $1.5 billion.
“We have worked in partnership with the business community to hold down unemployment tax increases while addressing the need to restore solvency to the Unemployment Trust Fund,” said Senator Madden.
The cost deferrals were recommended by the Unemployment Insurance Task Force, of which Senator Madden is a member. Specifically, the bill would base the employer UI tax on the “E” column of the tax table but without the 10 percent surcharge provided in the law.
“This is a tax break for employers designed to help businesses survive and thrive at a time when they face forceful economic challenges,” said Senator Madden. “This gives businesses a break but still maintains full unemployment benefits for the jobless.”
The committee approved the bill by a vote of 5-0. The bill now heads to the Senate Budget and Appropriations Committee for consideration.