Department of Labor and Industrial Relations Prepares Hawaii Business for Higher Unemployment Tax in 2010


As of January 2009, the Unemployment Insurance (UI) trust in Hawaii has been paying out approximately $31.7 million dollars of benefits EACH MONTH. The Department of Labor and Industrial Relations (DLIR) is anticipating that the UI trust will be depleted as of the 4th quarter in 2010. Current law provides for unemployment taxes to increase automatically whenever the UI trust falls below a certain level. In 2009, Hawaii employers were using Tax Schedule A and paying an average of 0.7% UI tax on a base wage of $13,000. In 2010, Hawaii will be moving to Tax Schedule F or G and the average rates will range from 2.75% and 3.3% on a new base of $37,900. These two changes will mean that some employers may actually be paying as much as three times more UI tax on a single employee. For more details, read the full news release: http://hawaii.gov/labor/news/2009/sep/MR2009_22_UITax.pdf

What employers need to do:

  • Factor in this substantial increase in UI tax when doing your planning for 2010
  • Update your employee fringe benefits load factor with this new amount so that you know the true fully-loaded cost of your employees
  • Diligently monitor your unemployment claims. Do not be complacent about challenging claims that you feel are not fair. Monitor your company’s experience rating
  • Contact Vantaggio HR if you need help in managing your UI claims

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