By Jon Dunwell
Iowa Workforce Development and Governor Kim Reynolds announced in late August the schedule of unemployment insurance rates used to tax Iowa employers will remain at the lowest possible level allowed by law for 2024.
This marks the second consecutive year at the current rates and only the second time Iowa’s rates have been at this level in a quarter century.
“We have done everything possible to insulate Iowa employers from ongoing inflation and other rising costs,” Reynolds said. “Our efforts have ensured that the tax burden for employers in Iowa will be the lowest possible rate for the second time in the last 25 years.”
Beth Townsend, executive director of Iowa Workforce, praised the “wise investments and prudent stewardship of the Unemployment Insurance Trust Fund” under Gov. Kim Reynolds “that have allowed us to provide stability to Iowa’s employers. Additionally, the positive impact of returning Iowans to work in the shortest time possible through the efforts of the Reemployment Case Management program has helped to keep the UI Trust Fund healthy and well-funded.”
Iowa law requires IWD to establish a table each year to determine the impact of unemployment tax rates on eligible employers. The trigger for deciding which unemployment insurance rate table to implement is derived from a formula based primarily on the balance in the Unemployment Insurance Trust Fund, unemployment benefit history, and covered wage growth.
The latest calculations based on this formula mean contribution rates in calendar 2024 again will be drawn from Table 8. Last year, the switch to Table 8 from Table 7 saved employers an estimated $72.20 per employee (based on employee wages totaling $36,100 or more with employers paying the median tax rate and remaining in the same tax rank).
Iowa was able to make the switch to Table 8 in 2023 due to decisions by Gov. Reynolds that helped keep the unemployment trust fund in a strong position following record benefit payouts during the pandemic. In 2021, Gov. Reynolds invested $237 million of ARP funds into the trust fund. In 2020, Reynolds previously had directed that $490 million of Cares Act coronavirus relief funds be used to backstop the trust fund during record unemployment.