With Tennessee’s jobless rate falling last year to an all-time low, the state is cutting what employers pay the state for jobless claims in the new year.
Effective Monday, Tennessee cut the wage base on what employers pay for unemployment insurance from $8,000 to $7,000, effectively reducing what most employers pay to the state for unemployment insurance fees by 12.5 percent.
The taxable wage base is the annual amount of wages paid to an employee, which is subject to state unemployment tax.
“This will amount to a tremendous savings for each and every Tennessee employer,” Tennessee Labor Commissioner Burns Phillips said Thursday. “They pay taxes into the state’s unemployment insurance trust fund and this will greatly reduce that tax bill.”
The move comes two years after Tennessee cut the wage base on unemployment insurance premiums paid by employers from $9,000 to $8,000 of workers’ annual income and five years after the state dropped an extra fee imposed after the Great Recession nearly forced the unemployment insurance trust fund into insolvency.