While purusing the local tv channel websites, I came across an article that indicated the Indiana House Labor committee voted 9-3 to raise more money from businesses by increasing both the taxable wage base (which is currently the first $7000 the employee earns - same as the federal wage base) and tax rates (current rate for most businesses in good standing is 2.7% on that first $7000). In addition, the bill also includes a one-year surcharge on employers that would help pay back federal loans.
This is totally frustrating to those who run small businesses like my husband and I!
Law makers should really consider the negative impact that this could cause on Indiana businesses - especially small businesses. The employers are the sole contributers for each employee. If the employer cannot handle the extra cost associated per employee, this could contribute to additional lay offs and unemployed workers. In addition to paying toward the employment fund, the Department of Workforce Development has every employer pay a yearly 'worker's training fund' contribution - which is a percentage based on the previous year's unemployment contribution. I am wondering at this point, if this fund has been tapped into to pay for unemployment benefits or is DWD really using the contributions to that fund as they should be?
What is particularly puzzling to me is the proposed one-year surcharge on employers to pay back federal loans. As employers, we pay 0.8% (in good standing) toward a federal unemployment fund on each employee's first $7000. Granted, it is not a lot, but why would employers again be charged for Indiana borrowing money from the Federal Unemployment fund? Employers are already contributing to this fund, and Indiana law makers want to charge employers for their state borrowing from it. It just does not make sense....
I think it is time to write my representatives in the House and Senate in the state of Indiana to express my concern about this possible legislation. From my vantage point, it seems like they have taken the easy road instead of trying to find a real solution.