Unemployment Comp Fund Going Broke
Due to rising unemployment in Florida, the Florida Unemployment Compensation Trust Fund is paying out more than it is taking in. It is expected that the fund will be depleted by the end of this month. During the 2009 Legislative Session, the Florida Retail Federation joined with other business organizations to proactively address the expected shortfall. At the urging of Florida's business community, the Legislature adopted temporary changes to Florida's unemployment tax law to increase funds being paid into Florida's Unemployment Compensation Trust Fund. These changes will be in effect for five years, from January 1, 2010 until December 31, 2014.
The following changes were adopted:
In anticipation of the depletion of the state trust fund, the State of Florida has issued a request to the US Department of Labor for advances from the federal Unemployment Compensation Trust Fund for August and September. These federal advances are interest free until January 2011.
The temporary changes will no doubt prove challenging for Florida's employers. However, without the changes adopted in the 2009 Session, Florida would be unable to repay the federal advances in a timely manner, and interest would accrue. The federal government could step in to force repayment. Florida employers could be forced to pay state unemployment compensation tax and the federal unemployment tax, without the state tax credit. The Legislature would likely have to approve an assessment or some other means of repaying the interest on the federal advances. In short, Florida's employers would get further and further behind. We anticipate the changes we advocated for in the 2009 Legislative Session will keep Florida moving forward towards a stronger economy.
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