Proposed Ohio legislation could impact your unemployment costs

Recently, the 135^th General Assembly of The Ohio Legislature introduced Senate Bill 116 which would revise Ohio's Unemployment Compensation Law.

The bill would change and amend the following:

• Raises the taxable wage base used for calculating employer contributions under Ohio’s Unemployment Compensation Law from $9,000 to $9,500, beginning on January 1, 2024.
• Eliminates, for benefit years beginning on or after the bill’s effective date, the dependency class caps for weekly unemployment benefit amount determinations and makes the maximum weekly benefit amount an individual may receive 50% of the individual’s average weekly wage, up to 50% of the statewide average weekly wage. This change would remove the  current practice of taking into account the number of dependents when calculating the weekly benefit amount that a claimant would be entitled to receive.
• Reduces, for benefit years beginning on and after the bill’s effective date, the maximum number of weeks for which an individual may receive unemployment benefits in a benefit year from 26 weeks to a range of 12 to 20 weeks, based on the unemployment rate in Ohio at the time the initial application is filed. This change ties the number of weeks an individual is eligible to collect unemployment to the state unemployment rate.  The greater the unemployment rate, the more weeks a claimant could be eligible to receive benefits.

Contributions on taxable employers would be paid on an employee’s earnings up to $9,500 instead of the current $9,000. The taxable wage base is the amount of an employee’s wages on which an employer pays unemployment tax.  Absent any changes to the tax rate tables, this change would result in employers being required to pay more in unemployment taxes.

Ohio currently has three dependency classes that pay out different maximums for unemployment and are as follows:

Under the proposed legislation, the dependency maximum weekly amounts listed above would be eliminated and replaced with the Statewide Average Weekly Wage which is currently $574.

Currently, someone could collect unemployment benefits for 26 weeks. Based on Ohio’s unemployment rate, the number of weeks that claimants could collect benefits are as follows:

SB 116 has been referred to the Insurance Committee where it is currently being discussed. All the information about SB 116 can be located here: https://www.legislature.ohio.gov/legislation/135/sb116

In future newsletters, we will provide updates and explore how SB 116 and other post-pandemic changes could affect your costs, along with strategies to reduce expenses. Some potential drivers that can impact costs are: increasing volumes of unemployment claims filed, continuing fraud and imposter claims, and increased taxes and contributions. If you have questions now, please reach out to us! Unemployment@sedgwick.com