Relating to unemployment insurance contribution rates for certain landscaping employers

Where it is now

Done: IntroducedFebruary 12, 2020
Skipped: SubcommitteeSkipped
Done: House committeeFebruary 26, 2020
Done: Passes the HouseFebruary 26, 202089–7
Skipped: Senate committeeSkipped
Done: Passes the SenateJune 10, 202049–1
Done: To the GovernorJune 24, 2020
Done: Signed into lawJune 25, 2020

What’s in it

AI summary Landscaping businesses that are newly required to pay into unemployment insurance will start with a specific tax rate. This rate will stay the same until the business has paid into the system for several quarters in a row.¹

Read the official explanation

This bill provides that a landscaping contributory employer, as defined by the department of workforce development by rule, which is newly subject to unemployment insurance shall pay contributions at the rate specified in the 21st benefit ratio rank until the end of the calendar year in which the employer’s account has been chargeable with benefits for consecutive calendar quarters.

Full bill text · What changed before it passed²

Fiscal note

Cost: up to $683,000 Compare with other bills

AI summary This bill requires landscaping employers to pay into the Unemployment Insurance Trust Fund at the same rate as construction employers. It is estimated that this change will increase contributions to the Trust Fund by approximately $683,000 annually.³

Read the fiscal note

Description

House File 2363 relates to unemployment insurance under Iowa Code chapter 96 and provides that effective July 1, 2020, landscaping employers will contribute to the Unemployment Insurance Trust Fund at the same rate as construction employers.

Background

Under current law there are two rates for new employers. New construction employers are placed in the highest rank, Benefit Ratio Rank 21, of the Unemployment Insurance Tax Rate Table, with a current tax rate of 7.5% of payroll. New nonconstruction employers are placed in Benefit Ratio Rank 12, with a current tax rate of 0.6% or 1.0% of payroll, whichever is higher.

Assumption

New landscaping employers will have approximately $10.5 million in total annual payroll.

Fiscal Impact

Requiring landscaping employers to contribute to the Unemployment Insurance Trust Fund at the same rate as construction employers is estimated to increase contributions to the Trust Fund by approximately $683,000 annually.