Lowest Number of Filings in Over a Decade
Governor Larry Hogan today announced that for the fifth straight year, Maryland employers will receive the lowest possible unemployment insurance (UI) tax rates allowed under state law. The low tax rate has been made possible by Maryland’s low unemployment and high job growth, signs of Maryland’s strong economy.
Unemployment insurance claim filings, both total and initial filings, are the lowest they have been in over a decade. Benefits paid dropped nearly $62 million between fiscal year 2018 and fiscal year 2019. These factors have resulted in lower unemployment benefit payments, which have helped keep the rate at Table A.
“Our administration is committed to creating more jobs and greater opportunities for our state’s businesses and workforce,” said Governor Hogan. “With a state unemployment rate of 3.7% and the lowest number of unemployment filings in over a decade, we are proud to say that more Marylanders are employed and more businesses are open than ever before.”
In 2020, the range of rates will be from 0.3% to 7.5%. The rate for new employers will be 2.6%. The rate for new construction employers headquartered in another state, which is calculated differently under Maryland law, will be 4.5%. The taxable wage base for 2020 will remain at $8,500.
“Thanks to the Hogan administration’s dedication to keeping Maryland open for business, employers will continue to benefit from a low unemployment insurance tax rate in the coming year,” said Maryland Labor Secretary Tiffany Robinson. “This low rate incentivizes businesses to hire and invest in their employees, which will continue to grow the private sector and strengthen the state’s economy.”
Over the past five years, Maryland’s Unemployment Insurance Trust Fund has steadily increased. Since September 30, 2015, the fund has grown by more than $309 million to nearly $1.3 billion.
The Maryland Unemployment Insurance Program is financed by the Federal Unemployment Tax Act (FUTA) and is administered by the Maryland Department of Labor. As required by Maryland law, the Division of Unemployment Insurance does an annual “temperature check” on the Unemployment Insurance (UI) Trust Fund. This temperature check is made using the ending balance of the Trust Fund every September 30. The reconciled ending balance is compared to the taxable wage base for the preceding four quarters. That ratio determines the UI Rate Table for the next calendar year.