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Labor and Economic Opportunity

2018 Unemployment Insurance Tax Rates Projected to Drop an Average of 4.5%

Significant savings to employers across Michigan

Contact: Chris DeWitt

LANSING, January 17, 2018 — Wanda M. Stokes, Director, Talent Investment Agency (TIA), announced today the unemployment insurance tax rates are projected to drop an average 4.5 percent for businesses in Michigan. Also, bonds that were issued in 2012, to provide money for the unprecedented increase in unemployment claims filed during the most recent recession, are projected to be paid earlier than expected. Due to responsible management of the Unemployment Trust Fund, and active participation by employers, the bonds should be paid in full by July 2020.

“These numbers show the comeback of Michigan’s economy,” Stokes said. “We have made tremendous strides that will benefit everyone.”

The unemployment insurance program provides temporary assistance to individuals who are unemployed while they return to work. This allows Michiganders to continue supporting their families and retains a skilled workforce for Michigan employers. Job providers pay a state unemployment tax into the Unemployment Trust Fund. This fund is used solely to pay unemployment benefits to eligible unemployed individuals.

“The average employer is projected to pay an estimated $403.20 per employee toward state unemployment tax and the Obligation Assessment during 2018,” Stokes stated. “This is 4.5 percent less than the average liability of approximately $422.10 during 2017."

The primary goal of an individual collecting unemployment benefits is to return to work. TIA works closely with the local Michigan Works! Offices and other entities to facilitate this transition. As of June 2017, the average individual collected 12.2 weeks of benefits before returning to work, ranking 8th lowest in the nation. Compare this to 10 years ago, when the average individual was collecting 14.7 weeks of benefits.

The taxable wage base is the employer’s payment of state unemployment tax generally on the first $9,000 that each employee earns. Employers that are delinquent on their unemployment account may have a taxable wage base of $9,500.

Employers may visit MiWAM or call the Office of Employer Ombudsman at 1-855-484-2636 with any questions.