BATON ROUGE – The trust fund that covers unemployment benefits for Louisiana workers is projected to hit the $1 billion balance mark this year, the highest total in nearly a decade.
The state’s Revenue Estimating Conference (REC) met Thursday to review the Louisiana Unemployment Insurance Trust Fund, managed by the Louisiana Workforce Commission (LWC), which is projected to have a balance of $1 billion this year. The trust fund is among the strongest of its kind in the nation, even though its taxable wage base on businesses is the second lowest in the country.
“The fact that our unemployment trust fund, which provides a safety net for workers in transition from one job to the next, is at its highest level since 2009 speaks volumes about the efficiencies implemented by our agency,” said LWC Secretary Ava Dejoie. “All members of Louisiana’s workforce benefit from a healthy UI trust fund, including not only job seekers, but employers and employees as well. All Louisianans should be encouraged by this projection.”
The unemployment trust fund has gained $59.6 million since the last REC review in 2017, with a current balance of $987,622,097. Louisiana’s employers pay into the fund, which, in turn, pays unemployment benefits to eligible claimants.
While the trust fund’s balance directly impacts UI claimants, it also affects employers and existing workers as well. The fund helps to sustain the state’s Incumbent Worker Training Program (IWTP), which allows employers to train their existing workers. Last year, the LWC approved nearly $18.9 million in IWTP contracts, which funded training for 24,241 employees, helped to create 1,587 jobs, and contributed to a 7.8 percent average wage increase for participants. Since Aug. 1, the LWC has approved more than $4.81 million in IWTP applications.
Louisiana’s businesses also benefit from the fact that Louisiana has the second-lowest wage base in the nation, as the first $7,700 of an employee’s paid wages are taxed for unemployment insurance in Louisiana. Employers in Louisiana also take advantage of the eighth-lowest average tax rate of total wages paid in the country, according to the latest figures from the U.S. Department of Labor (USDOL). No changes are planned to the current weekly amount of unemployment benefits, nor to the taxable wage base.
Several factors that have aided in the trust fund’s growth:
- Fewer people are on unemployment, and those receiving benefits are on unemployment for a shorter period of time.
- The most recent weekly unemployment claims report shows the number of continued unemployment claims at 16,545, down from 20,721 for the same week a year ago.
- The current average duration of an unemployment claim so far in 2018 is 15.9 weeks, compared to 2017’s average duration of 17.1 weeks.
- The LWC has a number of ways to ensure that unemployment benefits are given only to those qualified to receive them.
- For example, the agency systematically reviews new hire data that employers are mandated to report, and crosschecks against current unemployment rolls to ensure claimants are not receiving benefits when they return to work.
- Since 2014, LWC has required that all employers file their wage and tax reports electronically. This has allowed for greater reporting compliance among employers, as well as accuracy in computation of tax bills. Most employers also pay their tax bills electronically, and the agency continues to encourage all employers to use the online service.
- Through its statewide network of Business and Career Solution Centers/American Job Centers (AJC), the LWC works directly with unemployed individuals in re-employment sessions to assess job skills and provide tools to help them return to the workforce. However, AJC staff members are equipped to assist all Louisiana residents with their workforce needs, including job fairs for employers, training opportunities for existing workers and more.
- The agency has ramped up its efforts to combat worker misclassification, an unethical business practice used to prevent paying unemployment taxes and other wage-related taxes and employee benefits.
- LWC is ranked the fifth highest in the country for the number of misclassification discoveries per audit.
- The agency is a key partner in the interagency GAME ON state task force tackling worker misclassification, working with the Louisiana Department of Revenue, the Internal Revenue Service and USDOL’s Wage and Hour Division.
For information about the LWC, the UI division, IWTP, job fairs and more, visit www.laworks.net.
