Previously, many self-employed and small business owners were subject to the tax even though they never had any intention of ever collecting benefits, so it will provide an opportunity for small businesses to operate with slightly lower costs. For 2012, the standard Idaho unemployment tax is 3.36% on the first $34,100 in wages of each employee. State unemployment is currently deductible against federal unemployment payments, which means there will be an increase of $392 in federal unemployment payments for those that opt-out as they will have to pay the maximum $434 federal rate.
Perhaps an even greater effect of the bill is the prevention of exploiting unemployment benefits. Formerly, officers that control how and when they work could declare themselves laid off and collect benefits under the job-attached status. This meant they were expecting to be called back to work in a matter of weeks or months and were thereby exempted from job search requirements and essentially used the benefits to sustain themselves in slower periods. From the fourth quarter of 2007 to the first quarter of 2010, 5200 corporate officers collected roughly $36.2 million more in benefits than they had paid in. The remaining officers with no intent of ever claiming benefits and the rest of the workforce essentially paying for their benefits.
Brandon Morgan
Legerity Property Management, Inc.
