TALLAHASSEE, Fla. - State unemployment taxes are going up for businesses struggling amid the coronavirus pandemic, as the pace of new jobless claims continues to slow in Florida.
The U.S. Department of Labor on Thursday estimated 20,787 new jobless claims were filed in Florida during the holiday-shortened week that ended Nov. 28. That was an estimated 23 percent reduction in new claims from the prior week.
And while the federal Government Accountability Office on Monday issued a report questioning the Department of Labor’s reporting methods and data, Thursday’s estimate indicates a continued slowing of new claims in Florida since the start of October, following Gov. Ron DeSantis lifting state COVID-19 business restrictions.
But the decline in claims won’t alleviate increases in money that Florida employers will have to pay into the state unemployment system, which has been inundated since mid-March as the pandemic damaged the economy.
While such increases are typically announced by the Florida Department of Revenue, the Florida Chamber of Commerce this week advised members that a minimum unemployment tax rate will increase from 0.10 percent to 0.29 percent as of Jan. 1. A maximum rate will remain at 5.4 percent.
Information posted on the Florida Chamber’s website said that translates, in part, to employers at the minimum rate seeing a tax rate of $13.30 per employee, from $7 a worker to $20.30. Minimum rate employers are businesses that have not had any layoffs in the prior three years, according to the website.
Other employers with variable rates will also see increases in 2021 unless they are at the maximum 5.4 percent rate.
Carolyn Johnson, the Florida Chamber’s director of business, economic development and innovation policy, said Thursday the increases may be moderate compared to hikes businesses incurred after the 2007 to 2009 recession, but they come as employers have navigated effects of the pandemic.
“While a $13 increase per employee might not make or break somebody having a job, if you have a lot of employees, it can be pretty significant,” Johnson said. “For example, if you're an employer at the minimum rate, and you have 100 employees, you're seeing a $1,300 tax increase in 2021.”
Johnson said the chamber is forming a working group that will look at unemployment taxes. However, the top unemployment priority for the working group and the chamber heading into the 2021 legislative session will likely remain the state’s troubled CONNECT online unemployment system.
“We have to have a system that actually works and gets payments out the door in a relatively quick manner,” Johnson said.
Even with the issues surrounding CONNECT, particularly early in the pandemic as unemployment spiked, the state Department of Economic Opportunity has paid almost $19 billion in unemployment benefits to more than 2.12 million Floridians since March 15.
Most of the unemployment benefits paid out were covered by the federal government. However, the state’s share has been almost $3.72 billion, depleting the pre-pandemic pool of nearly $4 billion funded through the unemployment tax.
Florida’s unemployment rate in October was 6.5 percent, with an estimated 659,000 people qualified as unemployed out of a workforce of 10.1 million.
The surge in unemployment this year will also increase benefits offered by the state.
With Florida’s third-quarter jobless rate average at 8.6 percent, a formula was triggered that adds seven weeks, from 12 weeks to 19 weeks, in which jobless Floridians in 2021 will be able to draw assistance.
State law holds the number of weeks at 12 when unemployment is at or below 5 percent, with an additional week added for each 0.5 percentage point above 5 percent in the third quarter of a calendar year.
The formula doesn’t affect the maximum of $275 in weekly payments the state offers, among the lowest amounts in the nation.
Thursday’s U.S. Department of Labor estimate came as more than 22,000 layoffs are expected in the coming weeks in the state, with the majority tied to the travel and leisure sectors, predominantly at Walt Disney properties across Central Florida.
But more than 500 involve hotels and restaurants. And the hotel numbers do not include 45 jobs, from cooks and housekeeping to event management and security, that occurred Monday at the Hyatt Regency Coconut Point Resort and Spa.
Another 85 layoffs are tied to transportation and warehousing.
Canaveral Port Authority informed the state late last month that a round of permanent layoffs, involving 15 employees currently on temporary furlough, will occur Jan. 29.
“These unprecedented times have been, and remain, difficult,” Amanda Brailsford-Urbina, port vice president of human resources, recreation and customer experience, advised the state.
The port let 67 employees go on July 29 and had to let a single person go on Oct. 20.
The Florida Ports Council has estimated the pandemic has caused the loss of about $23 billion in economic activity tied to the 15 seaports in Florida.
Brailsford-Urbina said in the letter the authority “has taken measures to control and reduce spending throughout this period.”
The latest round of layoffs at the port authority includes three duty harbormasters, a manager of cargo container operations, a supervisor of cruise operations and the director of public safety.
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