Governor Corzine Signs Bill to Cut Employer Taxes and Discourage Raiding of Unemployment Fund
Governor Corzine signed into law a bill which would reduce employer taxes paid to the government when the UI fund’s reserves exceed a certain cap. Employer contributions account for 88% of the fund, but the fund has been tapped from time to time to pay for other government programs and initiatives. As a result, the UI fund is depleted and has not been able to meet its obligations at precisely the time when it is needed the most.
The new law creates a trigger for an automatic deduction in the UI tax paid by employers when the fund’s reserve ratio exceeds 5%. If the reserve ratio exceeds 7.5%, employer contributions would be reduced by 50%. For more information, see http://www.njleg.state.nj.us/2008/Bills/S1000/562_S3.HTM