This bill amends Iowa's unemployment insurance tax laws, specifically focusing on the definition of taxable wages and the calculation of employer contributions. It modifies the definition of taxable wages by removing wages paid to employees from other states that have reciprocal agreements with Iowa. Additionally, the bill reduces the percentage of the statewide average weekly wage used in the calculation of taxable wages from 66.66% to 33.33%. The bill also revises the contribution rate structure by reducing the number of benefit ratio ranks from 21 to 9 and changing the contribution rate tables from eight to four, with the highest contribution rate now capped at 5.40%.

Furthermore, the bill introduces a new surcharge for employers whose average benefit ratios exceed 1.25 over the previous three fiscal years, amounting to 10% of their contributions for that fiscal year. This surcharge applies only to contributory employers who are no longer newly subject to the unemployment insurance laws. The bill encourages employers to utilize any savings from these changes to support employee salaries or benefits or as an alternative to unemployment benefits during seasonal unemployment periods.

Statutes affected:
Introduced: 96.1A, 96.7