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November 13, 2003

Florida Unemployment Insurance Rates to Rise; State Law Protects Businesses, Workers by Keeping Unemployment Fund Stable

TALLAHASSEE - Florida unemployment insurance rates will rise in 2004, as required by laws put in place to ensure that the state's unemployment compensation trust fund maintains a sufficient balance to protect workers and employers, the Florida Department of Revenue (DOR) announced.

A typical Florida small business with 10 employees, paying the minimum unemployment-compensation insurance rate, will see an increase of $154 per year in its unemployment compensation premium. More than half of the 426,955 Florida employers with workers covered by unemployment insurance pay the minimum rate.

Florida's unemployment-compensation trust fund currently has a balance of about $1.44 billion. Last year, Florida lawmakers and Governor Jeb Bush infused the trust fund with $434 million as part of President Bush's Job Creation and Worker Assistance Act of 2002 to hold rate increases to lowest amount possible. Florida's strong job growth also has helped to avert larger increases seen by employers in states such as New York and Texas, which now are borrowing billions for their trust funds.

Florida employers who pay minimum rates will pay $24.50 per employee per year, or $3.50 for every $1,000 in wages, up to a maximum of $7,000 in wages. Formerly, these employers paid $1.30 per $1,000 in wages up to a maximum of $7,000 in wages. In Florida, wages above the $7,000 level are not subject to the insurance premium, though other states impose premiums on a larger share of earnings.

The maximum rate, paid by about 18,000 Florida employers who have had the most layoffs, will not change. The maximum rate is $54 per $1,000 per employee per year, up to a maximum of $7,000 in wages. New employers also will not see a higher rate. They will pay $189.00 per employee per year until they have accumulated enough time in the program, with no benefit charges, to qualify for the minimum rate. Next week DOR will mail notices of the new rates, effective for calendar year 2004. The first payment under the new rates will be due April 1, 2004, with the business's regular quarterly unemployment tax report.