This bill amends Iowa's unemployment insurance tax laws, specifically focusing on the definition of taxable wages and the calculation of employer contribution rates. 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%. This change aims to lower the taxable wage base for employers, which could potentially reduce their overall contributions to the unemployment compensation fund.

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 is also lowered from 9.0% 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. Overall, the bill aims to streamline the unemployment insurance tax process while providing financial relief to employers.

Statutes affected:
Introduced: 96.1A, 96.7