New Jersey to lower unemployment tax rate for employers, projecting $300 million in savings
NEW JERSEY — The New Jersey Department of Labor and Workforce Development announced that stronger-than-expected unemployment insurance (UI) contributions will allow the state to lower the UI tax rate paid by employers, starting July 1.
The rate reduction, shifting from “Column D” to “Column C” on the state’s UI tax table, means employer contribution rates will range from 0.5% to 5.8%, down from the current 0.6% to 6.4%. The change is expected to save New Jersey businesses an estimated $300 million in the coming fiscal year.
“This unemployment insurance tax reduction demonstrates a major milestone in New Jersey’s economic recovery following the COVID-19 pandemic,” Gov. Phil Murphy said in a statement. “We are now able to ease employers’ burdens while continuing to strengthen our workforce.”
Labor Commissioner Robert Asaro-Angelo said the change reflects the resilience of New Jersey’s economy and will help promote job creation and economic growth.
The UI tax rate adjustment comes as the Unemployment Insurance Trust Fund has recovered faster than anticipated, following unprecedented claims during the COVID-19 pandemic when $40 billion in benefits were paid to 1.6 million workers over 21 months.
Legislative leaders praised the reduction as timely relief for employers facing economic challenges. “Reducing the unemployment tax rate for employers will give them more resources to operate profitably, keep their workers on the payroll, and continue to contribute to the state’s economy,” said Senate President Nick Scutari, D-Union.
The lower tax rates take effect at the start of the new fiscal year. Employer-specific UI contribution rates will continue to reflect both the health of the state’s UI Trust Fund and each business’s history with unemployment claims.
