This 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, provided those states extend similar comity to Iowa. Additionally, the bill reduces the percentage of the statewide average weekly wage used in the calculation from 66.66% to 33.33%, which will affect the maximum weekly benefit amounts. 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 decreasing from 9% to 5.40%.

Furthermore, the bill alters the computation of the current reserve fund ratio by basing it on the preceding year rather than the previous five calendar quarters and removes the requirement to add $150 million to the total funds available for benefits. Employers will now be assigned a contribution rate based on the new benefit ratio ranks and corresponding lettered contribution rate designations. The bill encourages employers to use any savings from these changes to pay for employee salaries or benefits or as an alternative to unemployment benefits during seasonal unemployment.

Statutes affected:
Introduced: 96.1A, 96.7