The bill amends Iowa's unemployment insurance tax laws, specifically modifying the definition of taxable wages and the calculation of employer contribution rates. It eliminates the inclusion of wages paid to employees from other states in the taxable wage calculation, which previously considered wages from states that extend reciprocity to 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%. This change aims to lower the taxable wage base for employers, thereby potentially reducing their unemployment insurance tax burden.

Furthermore, the bill revises the structure of the contribution rate tables and the calculation of the current reserve fund ratio. It reduces the number of benefit ratio ranks from 21 to 9 and the number of contribution rate tables from eight to four, simplifying the system. The highest contribution rate associated with the highest benefit ratio rank is also decreased from 9% to 5.40%. Employers are encouraged to use any savings from these changes to support employee salaries or benefits or as an alternative to unemployment benefits during seasonal unemployment.

Statutes affected:
Introduced: 96.1A, 96.7