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November 30, 2004

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

TALLAHASSEE - Florida unemployment insurance rates will rise in 2005, as required by laws that ensure a stable unemployment compensation insurance trust fund 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 $49 per year in its unemployment compensation premium. Almost half of the 446,000 Florida employers with workers covered by unemployment insurance pay the minimum rate.

The increase in the state's unemployment-compensation insurance rate does not include the effect of unemployment compensation claims filed during August and September after four hurricanes struck the state. Unemployment claims resulting from hurricane damage may have an impact on rates in 2006.

Florida employers who pay minimum rates will pay $29.40 per employee per year, or $4.20 for every $1,000 in wages, up to a maximum of $7,000 in wages. Formerly, these employers paid $3.50 per $1,000 in wages up to $7,000. In Florida, wages above the $7,000 level are not subject to the insurance premium.

The maximum tax rate, paid by about 18,000 Florida employers who have had the most layoffs, is $54 per $1,000 per employee per year, up to a maximum of $7,000 in wages. New employers will pay $27.00 per $1,000 in wages per employee or $189.00 for wages up to $7,000 per year until they have accumulated enough time in the program to qualify for the minimum rate. Neither the maximum rate or the new-employer rate will change in 2005. DOR will mail notices of the new rates today to all 446,000 covered employers. The new rates will be effective for calendar year 2005. The first payment under the new rates will be due April 1, 2005, with the business's regular quarterly unemployment tax report.

Florida's unemployment-compensation trust fund had a balance of about $1.6 billion as of June 30, 2004. In 2002, Florida lawmakers and Governor Jeb Bush infused the trust fund with $449.6 million in federal aid to hold future rate increases to lowest amount possible.