Late Wednesday night the General Assembly agreed to a deal with the intention to eliminate the state’s recession-era unemployment compensation debt to the federal government. The move supported by the OMA and other business allies will potentially save Ohio’s businesses more than $400 million in FUTA penalties. Without this fix employers were staring at a possible $168 per employee penalty to be paid in 2017.
The new plan will borrow from the state’s unclaimed funds to pay off the debt in November 2016. Then employers will repay the state-backed loan by paying a per employee surcharge in 2017. This surcharge is estimated to be $50. Overall, the plan will save employers around $70 per employee in 2017.
This bill is on Governor Kasich’s desk for signature.
While the General Assembly addressed the short term debt issue, the new plan does not address the long term solvency of the system due to the structural imbalance that contributed to the heavy borrowing. The administration and General Assembly have committed to addressing this root issue with OMA-backed House Bill 394 later in the year.