The drop in unemployment insurance is good news for Tennessee employers.
Most employers will see their quarterly unemployment insurance premium rates decrease, thanks to improvement in the health of the state unemployment trust fund.
The rates will decrease because the balance of Tennessee's Unemployment Compensation Trust Fund was more than $650 million on June 30, triggering the permanent expiration of the 0.6 percent additional fee in premium rates. Additionally, the trust fund trigger temporarily shifted the Premium Rate Table, further increasing potential savings for employers for the next two calendar quarters, state officials said.
During the recession, the state legislature had created the additional fee to help bolster the state's fund, which was facing severe strain because of high unemployment.
This provision became effective January 1, 2009 as the trust fund became nearly insolvent, causing the state to take a $20 million loan from the federal government to continue benefit payments. The state paid back the federal loan within a month, and the measure has steadily improved the health of the fund to its balance of $817,606,274 as of August 23, 2013.
"Tennessee has shown a tremendous amount of fiscal responsibility managing the fund into which employers contribute," said Labor & Workforce Development Commissioner Burns Phillips. "This announcement is good news for both employers and the citizens of our state."