Employers getting bill for unemployment interest
June 20, 2013
Nevada employers can expect a bill in the mail over the next week, assessing them per worker to pay the interest on money the state borrowed from the federal government to cover unemployment insurance.
The Employment Security Division will be sending employers a bill that will amount to an estimated $25 per employee, to cover $17 million in interest on Title XII loans due Sept. 30.
The total loan balance is $560 million, said Renee Olson, administrator for the Employment Security Division of the Department of Employment, Training and Rehabilitation.
Payments are due to the state by July 31, and are based on each employer’s total taxable wages paid during the 2012 calendar year.
Officials said the temporary assessment payment must be kept separate from quarterly unemployment contributions for accounting purposes and can only be used for the interest payment, Olson said.
Nevada employers contribute to the state’s unemployment insurance trust fund, which is used to pay regular unemployment benefits.
Since July of 2008, Nevada has paid more than $3.4 billion in regular unemployment insurance benefits and $3.6 billion in federal benefits for a combined total of more than $7 billion dollars in unemployment benefits.
“Nevada began the recession with over $800 million in its trust fund, but depleted it due to the overwhelming number of people receiving benefits. Since October 2009, Nevada has had to borrow from the federal government in order to continue payment of regular unemployment insurance benefits to eligible unemployed workers,” Olson said. “The temporary assessment will be collected only so long as necessary. We understand that the recession has taken a toll on Nevada’s businesses, but it is vital that we pay the interest on the loan and begin to make the trust fund whole again.”
The provisions of Nevada Revised Statutes 612 applicable to the collection of unemployment insurance contributions also apply to the collection of the temporary interest assessment. Interest will be charged at 1 percent of the amount past-due for each month the assessment remains unpaid. Olson said she will be working with the state treasurer’s office, and bond underwriters to evaluate the cost and benefits of moving forward on bonding the outstanding unemployment insurance loan debt. If a bond solution is implemented to address the outstanding federal loan the aforementioned AB 482 interest assessment will not be necessary in the future. More information is available at https://uitax.nvdetr.org/crphtml/whats_new.htm.