For employers, unemployment tax rates rising

Published 12:25 pm Wednesday, January 13, 2010

Unemployment tax rates are rising this year for Alabama employers, but according to the Department of Industrial Relations, there are steps employers can take to keep their tax rates steady.

Unemployment insurance is a tax paid by employers on each of their employees, and is paid on the first $8,000 earned by each employee yearly.

Department of Industrial Relations Director Tom Surtees said in a press release the rise in unemployment tax rate can be attributed to the down economy.

“This information should not come as a surprise to anyone, as unemployment in Alabama has risen during this worldwide recession,” Surtees said.

Jo Doyal, of the Alabama Department of Labor Relations, hosted an unemployment tax rate seminar in Montevallo Jan. 13 to start advising business owners about what can be done.

“I don’t think people know you can protect your rate and protect your business,” Doyal said. “We’ve learned a lot and gotten a lot of feedback from employers.”

In 2009, the average tax rates per employee per year ranged from $64-$512. In 2010, the rates will increase to $172-$664 per employee per year.

Doyal offered advice to help business owners keep tax rates steady, saying it all begins with performing thorough job interviews.

“Call references,” she said. “Make sure what people are putting on their resume is right.”

She also advised employers to keep track of former employees, who could one day put in an unemployment claim.

“A lot of people say, ‘I had somebody work for me years ago. I don’t understand how I got involved with this claim,’” she said.

Other tips to keep unemployment tax rates steady were:

-Maintain good employee records.

-Help combat fraud. If you hear of unemployment fraud, report it to the Alabama Department of Industrial Relations at 1-800-392-8019.

-Use the New-Hire Program, which allows you to report your new employees.

-Respond to your unemployment insurance forms in a timely manner.

-File and pay your unemployment insurance taxes on time.

-Notify the Department of Industrial Relations immediately of address changes. If this isn’t done, forms and notices could go to the wrong address, resulting in you responding late.

For more information on unemployment tax rates, visit