Maine’s unemployment insurance taxes going up next year

Posted Nov. 29, 2011, at 5:24 p.m.
Last modified Nov. 30, 2011, at 5:36 a.m.
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 Lt. General Robert J. Winglass (Ret.).
Courtesy of Governor's Office
Lt. General Robert J. Winglass (Ret.).

AUGUSTA, Maine — Many Maine employers will see a slight increase in the taxes they pay to fund the state’s unemployment system come January. But even a small increase has employers upset, although not surprised.

“We are looking at a very small increase, 2.3 percent.” said Labor Commissioner Robert Winglass. “Now that is on average with experience rating affecting an individual employer’s tax rate.”

The amount of the increase ranges from $2.40 per year per worker to $18 per worker for the year. Employers pay the tax on the first $12,000 in wages they pay for each worker. The unemployment system in Maine is entirely funded by employers.

“And there are some employers that could see a decrease in their tax rate because of a change in their experience rating,” said Laura Boyette, Director of the Bureau of Unemployment. She said Maine has a complex rating system for employers based on a number of factors. One is on how much an employer has used the unemployment fund, the experience rating.

“Where they end up in the rate schedule can also shift from one year to another,” she said. The new rates take effect January 1, 2012, and Boyette said employers will receive notice of changes affecting them.

But even a small increase in taxes will have a negative impact on some employers, said Peter Gore, vice president of the Maine State Chamber of Commerce. He said while the increase will have a small dollar impact on most employers, coming out of the recession any impact can hurt.

“This is money they can’t use for other things,” he said, “like paying for increased health insurance costs or increased energy costs or even adding another employee.”

David Clough, Maine Director for the National Federation of Independent Businesses, said the small businesses he represents expected some sort of increase in the UI tax and are thankful it was a small increase.

“This is like a pinch to the arm and not a punch to the shoulder,” he said. “There are a lot of other states where employers are getting hit really hard.”

Maine is one of a handful of states that did not have to borrow from the federal government to make payments to laid-off workers. Twenty-nine states have not only raised taxes on employers, they have imposed surtaxes to pay back those loans.

“We were there once, in the late 1980s and early 1990s,” Clough said, “it was a real mess. It hurt everybody.”

Gore said that situation led employer groups and union representatives to negotiate a compromise that led to higher tax rates, with some benefit reductions, during the Gov. Angus King administration. That is still in effect today and is credited with Maine’s healthy trust fund balance that has weathered the recession.

Gore said keeping the fund healthy requires stronger policing of fraud and abuse of the system. He said employers are grumbling that they have had individuals receiving unemployment benefits refuse to take a job because the benefits were better than the job being offered.

“There have been bona fide job offers made to recipients of unemployment insurance and those job offers have been refused because the person has indicated they think they could do better staying on unemployment insurance,” he said. “Based on what I am hearing, this will be an issue before the Legislature when they are in session in January.”

Clough said the issue has been discussed during the private sessions between employers and Gov. Paul LePage at his most recent job creation meetings. He is not aware of any study establishing how big a problem it is, but he said it needs to be addressed.

“I have heard it from employers,” he said. “You have some that are getting unemployment and looking for the ideal job and not a job that will give them a paycheck.”

Gore said he believes the Labor Department is trying to address the problem and faulted those employers that have not reported the problem to the agency for an investigation.

Winglass said he takes the issue of all fraud in the system “very seriously” and is beefing up enforcement efforts. He said he looks at the health of the unemployment trust fund every day and realizes fraud and errors erode the health of the fund.

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  • Anonymous

    Unemployment taxes on employers would not be so bad if the system only paid benefits to people legitimately out of work through no fault of their own.  As an employer I’ve had to let go employees caught stealing from the company or for rarely showing up to work on time and the system pays them unemployment to stay home and watch TV or play games.  Is it any wonder that employers have been leaving this state for decades?

  • chris reid

    Thanks for your input but did you contest their claims when you were notified by the department of labor? Or did you stick your head in the sand because they had something on you which was not so nice??

  • Anonymous

    It is absolutely incomprehensible to me that businesses complain about a small increase in unemployment taxes, and blithely pay, without as whimper of complaint, health insurance costs. If businesses want to be more profitable (presumably most businesses’ goal) they would be pushing for a single payer health care system. Seeing health insurance costs go down by 50% would dwarf any increased unemployment costs. Why aren’t Chambers of Commerce and other organizations representing businesses screaming for this change?

  • http://pulse.yahoo.com/_NXPTPFL746OV2VGR5WBOEUF6W4 Roger

    Another useless gov mandated program.  Let eh workers KEEP the money they earn. And stop forcing here employers to give more money to the state for each employee they hire.

  • Anonymous

    employees not employers  should be paying into their own unemployment insurance as they are the one whom use it.. same as a retirement or savings same as health.  and yes business are closing and leaving as the spread the wealth side somehow have this hallucination that businesses have these deep pockets overfilled with excess cash. the businesses that could not put anything away for these rainy days of this depression are the ones who will end up as road kill. 
    Funny how society in general thinks that somehow besides a well paid weeks work the employees health insurance should be paid by the employer, who spends 8 hrs and less in many jobs at work ….and spends 16 hrs at home… where his lifestyle drinking and whatever accidents happen. somehow the business is responsible to pay for this????

  • Anonymous

    That would be fine, if the employees could use it as a tax deduction instead of the employers, and then when employees collect it could be tax free money, just like any other insurance benefit. Of course the price of labor would have to go up accordingly.  

  • Anonymous

    Here’s an interesting fact:
    Unemployment in southern Maine is among the lowest in the nation.  The unemployment rate in the Portsmouth-Kittery Metropolitan Area is 4.6%.  Of the 332 metro areas in the country only ten (10) have lower unemployment rates than Kittery. And nine of those are west of the Mississippi.  The Portland Metro Area is not far behind at only 5.6%.
     
    The national unemployment rate is 9%
     
    http://bls.gov/web/metro/laummtrk.htm
     
    (GOP presidential candidate Rick Perry prances around bragging about creating jobs in Texas when his Dallas – Fort Worth Metro Area has an unemployment rate of 8.6%)
     
     
    Stop running Maine down.  We are an economic leader but sometimes act like we’re somebody’s poor relation.

  • Anonymous

    You are absolutely right. My company competes with firms in Canada. There, health care is half as expensive, more efficient and doesn’t unpredictably jump in cost 15% or more each year.

  • Anonymous

    I am a Maine employer. My company has 18 employees. We have been in business for almost a quarter century and have never had a lay off. We also have very low employee turn over. I am getting pissed off hearing these politicians and political appointees constantly trying to make Maine workers out to be some kind of lazy bums who would rather collect unemployment then to work for a living. It just isn’t true. I am sure there is a small percentage of the workforce who are gaming the system but the majority of Maine workers want to work. Anyone who claims that they can’t find workers because unemployment benefits are to high needs to take a look at how much they are paying their employees. Last summer one of our long time employees informed us that he was going to retire when he turned 62 which was in about a year. We ran an ad in the paper and within two weeks had hired a very well qualified new employee. Due to the nature of our business it will take about 6 months for the new employee to get completely up to speed. The quality of the applicants was, in my opinion, very good. I learned a long time ago that if you hire quality people, pay them what they are worth , give them direction as to what to do and then get out of their way and let them do their job that they will do it and do it very well.  

  • Anonymous

    I just don’t have employees anymore. Contract the work out. No fuss, no muss. 

  • Anonymous

    “You have some that are getting unemployment and looking for the ideal job and not a job that will give them a paycheck.”

    Republican leaders would love to have a rule that would force Americans to accept the very first job offer they get. Thus, if you’re laid off from a $50,000 salary job, and there’s an opening at Wal-Mart for a minimum-wage job with no benefits, you should be forced to accept that job. It’s all about personal freedom for them–until it’s not.

    They are determined to enforce the race-to-the-bottom. They want us all to be desperate enough to take anything we’re offered.

    This can sound great until you realize that you, yourself, could get laid off. Then YOU become one of the people Republican leaders want us to despise.

  • Anonymous

    “I have heard it from employers,” he said. “You have some that are
    getting unemployment and looking for the ideal job and not a job that
    will give them a paycheck.”

    A few years ago I lost my job due to restructuring and found myself on unemployment for the first time in my life (I’m old). I took the first job that was offered to me because I guess I thought like LePage (God help me!) and I didn’t feel like it was right or respectable to take “free” money if I was capable of working.

    Today I travel to a job that pays me $3.00 less per hour and has very few benefits. At $3.50 per gallon for gas I spend $75.00 each week traveling straight to and straight home from work. Extra driving is kept to a minimum. I had to buy another car (used – can’t afford new) because mine was worn out. Knock off another $50.00 each week to pay the health insurance deductible I didn’t think I’d ever meet without something catastrophic happening. I was wrong. I’m close. Fortunately my health issues have not caused me to miss much work, because losing more than a couple of days each year for illness doesn’t pay.

    By the time I’ve paid my bills there is less than nothing left. My savings ran out long ago and my credit card hovers at the same level that it did two years ago because I can’t make any headway on it. I have no time for my home or family because with the travel time added to my work week I am away from home 55-60 hours/week. The stress is starting to show up in many ways. I don’t sleep well so on the weekends I crash and burn. My relationships suffer because I don’t have time for them.

    I wish I’d held out for the “ideal” job. It would have been closer to
    home. It would have paid closer to what I was getting in my last
    position. It would have a decent health insurance benefit. It would have
    opportunities to improve myself and my pay. Am I greedy? Is that too
    much to ask? It was my choice to take the first job I was offered because I thought it was the right and respectable thing to do. Now I wonder. I’ll know for sure it was the wrong choice when the bank takes the key to my home and I have to walk away because my car won’t take me. Good news for the state though…chances are good I won’t have an address or a checking account, so paying me unemployment won’t be part of your burden.

    Mr. LePage, you don’t know everything you need to know, and until you talk less, listen more, and throw in a good dose of common sense, you never will. I understand many of the problems faced by Maine businesses in this economy, but your comment is one-sided, short-sighted and ignorant.  While I appreciate your personal trip from poverty to the Blaine House, I wonder if you got out too soon. Maybe a little time as a poverty level tax paying adult in the state of Maine would have been useful to you in your current position.

  • Anonymous

    Unemployment numbers are comprised of those that are in the job market for the past 30 days. It does not include those that have not been in the job market in the last 30 days: people who have given up looking; those that have gone off unemployment because it has run out. One solution to unemployment is High Speed Universities check it out

  • http://pulse.yahoo.com/_7T3YNF6MG3FPEAVTFIJC44VQUI Dlbrt

    How many DONT recieve benefits because an employers erroneous accusations of wrong doing?

    Fraud surely isin’t  just limited to the employees!

  • Anonymous

    I agree with you 4mermainer, but your business appears to require at least semi-skilled labor to operate. I think the problems arise in businesses where skilled labor is not needed, hence the low pay and the low quality of SOME in the labor pool they tend to attract. Low wages aren’t very attractive, but if your company has to compete with countries like China, you can’t pay $15 an hour for labor that will make you back $10. 

  • Anonymous

    More taxes on Maines business owners (me) are really not what I need at this time.
    Or any other time.

  • Anonymous

    You have to fight it/appeal the decision.  You have to make sure the lay off forms are filled out correctly.  I think a lot of employers overlook notices from the unemployment office.  We’ve never had to pay unemployment for someone who quit on their own accord or terminated for misconduct.   

  • Anonymous

    I would say that rarely happens.  The unemployment department gives ample opportunity to appeal and appeal again.  In my experience, the unemployment department does a very thorough job investigating appeals.  

  • Anonymous

    That is exactly like us , this is what it has come to . Small businesses can not affored to keep paying the premiums of increases .  The state of Maine has the highest taxes on everything and the least amount of  jobs for people .  They are driving us real Mainers out of our own state with these taxes on everything including our REALESTATE TAXES .  My REALESTATE TAXES are so high now compared to just a few years ago that I dont know how much longer we can stay on our land . Where I live its by the ocean so of course the RICH PEOPLE want it and the RICH PEOPLE will end up with it . Poor people arent suppost to have anything nice !!!  –so they think !!

  • Anonymous

    Why would the price of labor have to go up. You are one of those we speak about, everything gets shifted onto the business until the business closes. Its a 2 way street , but you junker live on a one way, its all about you not the other employees and survival of the company.  you can keep raising prices of the products you make… if you understand economic competition and you’ll be out of business.  Tell us, who ever… invented… 40 hr work week ,, Ill tell you…the unions. Who wrote the laws of worldly labor in the sky a person can only work 40 hrs a week.. employees go home and work around the house for the other 128 party drink do stupid things and want the business to cover all their expenses…..since when are business responsible for you when your not at work. Are you responsible for paying you friends insurance because he’s your neighbor??  An example is employers health insur should only be allowed t0 cover you at work not on free time.

     business owners and those who have been in business understand what it is to work till the job is done. Those who understand how business works are always the best employees in a company.

  • Anonymous

    You need to take your pills

  • Anonymous

    Clearly, you’re unable to refute my statement.

  • luvGSD

    The reason businesses don’t fight for single-payer health care is a sad one:  employer-provided health insurance keeps wages down by stifling competition in the labor market.  People stay in crappy jobs with low wages because they’re afraid of losing their health insurance.

  • Anonymous

    The employer already has to pay 2% more than the employee to social security.  Employee pays 4.2% to social security each week, employer has to match that and then pay 2% more.  

    Keep tacking stuff on to the employers who are already drowning in taxes and insane insurance costs.  Wonder why your employer can’t give raises, offer health insurance or give bonuses anymore?  This is why!

  • Anonymous

    Gary I would really like to agree with you, but it isn’t companies who require semi-skilled workers  that supposedly are crying to the politicians. Two examples given by Mr. LePage are Mid-State Machine and Fisher Engineering, Mid-State claims difficulty in finding machinist and Fisher claims to have trouble finding welders and also claims to have a 92% employee turn over rate. Why is Fisher having such trouble finding welders and apparently keeping them when just 40 or so miles down the road BIW has no problem at all finding welders and has a turn over rate in the low single digits?

  • Anonymous

    No matter. Not too many jobs are ever created in Maine that ends in a career. Just hamburger flipper jobs anyway, with a very high turnover rate. Just increase the price of hamburgers whats the problem. They will still come.

  • Anonymous

    Bull I have seen employees get fired due to stealing, not showing up for work, not doing the work etc. and the employer told unemployment and filled out the proper paperwork for this and they still got unemployment benefits.  This was argued and argued but still unemployment let them have it.  I see so many people on unemployment right now and are not looking for jobs but collecting checks.  The unemployment system stinks and there are to many that get away with this.

  • Anonymous

    Excellent point 4mermainer. If the truth be told, it would be more like “Fisher plows can’t find qualified welders who are willing to work for cooley wages”. I have always paid my employees a living wage and treated them with the respect that they deserve. I have never had trouble retaining help.

  • Anonymous

    So you want them to take some of their ridiculously high wage of $7.50 an hour and contribute to their own unemployment fund? Nice. The strong survive and the weak get eaten, right?

  • Anonymous

    Exactly my point. Isn’t it strange that we had never heard of all of these companies who could not find “qualified” workers until the JOBS, JOBS, JOBS Governor found out that he could not keep his campaign promise and started blaming the jobless, and just about everything else for unemployment.

  • Anonymous

    I have a friend who worked for a construction company in central Maine. His employer would not hand out paychecks until 5:05 on Friday. With good reason. His paychecks bounced on a regular basis. He quit and filed for unemployment. He was denied the first two appeals, because the deputy told him that he needed to bring it to his employers attention and give them a chance to correct the problem. He finally prevailed in his third appeal when the company book keeper admitted that they regularly wrote checks before making a deposit. It took almost 6 months. Don’t despair Roger, the state is still on the side of the employer. Yes, I know, he should have taken three burger joint jobs until he found another job with rubber paychecks. 

  • Anonymous

    Poor McDonald’s has been forced to start their employees at $15 an hour in North Dakota because of a lack of workers due to the oil boom. The price of burgers has not gone up and not a single one of them has closed. Poor McDonald’s. 

  • Anonymous

    The employer pays the same percentage on payroll taxes as they have for fifty years, 6.45%.  The only reason employees pay 4.45% is because of the payroll tax roll back passed two years ago to give working people a bit more spendable income to weather the economy.

    Without real action on jobs, these costs go up.  We can either spend some money now and create some JOBS or keep playing this game where all social benefit costs will continue to rise due to the stresses of low participation in the economy.

    We are suffering from an output gap.  We are leaving willing workers on the sidelines and that is weighing us down.  At least those job creators are making lots of profit…..(Waiting for the trickle….)

  • Anonymous

    All politicians are pointing the finger in the wrong direction to distract us from the truth. LePage is no exception. The American consumer and our blind lust for cheap Chinese products is what is tanking our economy, keeping the wages depressed, and crushing small business. We simply can’t continue to send all our money and jobs to China and then be amazed when we have no money or jobs. It makes us look like rubes. Buy American, pay your taxes, and stay to hell out of WalMart. Our economy would be in the pink in no time, Americans would have jobs that pay a living wage, and our debt to a communist nation would start to go down. 

  • Anonymous

    It could be that fisher plow dose not treat there people very well ?? Yes you are right about BIW  i know i worked there as a welder for 20 years before i retired early . I know people that will work for low wages IF they are treated right an not used as slaves.

  • Anonymous

    Yeah except all those jobs are low-income jobs working at shops, restaurants, and the mall.  Plus there is a huge culture of contracting workers out for almost everything in southern Maine due to absurdly high health insurance costs in this state (thanks democrats).  When contracted self-employed workers are not working, those numbers are not counted in unemployment because they don’t qualify for unemployment.  The numbers for unemployment in southern Maine are VERY deceiving.

  • Anonymous

    Sounds like you should be working for 7:50 an hour an pay all of those things if you did you would be on the street an no roof over your head.

  • Anonymous

    Well if people like you had treated people like humans not machines and you paid a decent wage, had decent job conditions, and cared a little bit more about the human side of your workers. Then maybe you wouldn’t have to hire union workers to get the job done because that is why unions were created in response to greedy mean people like you. Obviously you have no idea what it is like to work for someone so until you do maybe you shouldn’t ride such a high horse.

  • Anonymous

    And you know this because the tooth fairy or, just as credible, the Maine Heritage Policy Post Office Box (they don’t have an actual address) told you?

    If you were right, the per capita income for southern Maine would be below average.  But it isn’t.  It’s way above average for the country.  For instance, of the 280 Metro Areas listed by the Census, Portland Maine ranks 25th; that’s in the top 10%.

    Here’s a link to some actual facts:

    http://en.wikipedia.org/wiki/Highest-income_metropolitan_statistical_areas_in_the_United_States

    Stop running our state down for your own political purposes.

  • Anonymous

    Tell you what Mr Know it all.. knowbody here makes less than $14  starting… all the way to six figures.. never had union and if we did i would shut the place down… If we were greedy they would be making $5…… Obviously YOU have no idea.. and you group all businesses as one I hope someday you wake up,,, stop your whining childish complaining and have your own business…. then we will see what you have to say about paying employees and how much money you should earn.. until then you should keep you blabber shut since you haven’t a clue

  • Anonymous

    Years ago I moved back in state because of a death in the family, and did exactly what you did. I took a much lower paying job rather than more pay on unemployment because I felt bad taking the unemployment. My problems weren’t the commute,  the place was a fire trap and not fit for anyone working there. I did stay a few months and quit when I found another job also at low pay, but at least I wouldn’t die in a fire. I hope things work out for you with your home, car, and your very existence.

  • Anonymous

    Probably very few.

  • Anonymous

    You’re darn right I appealed the outcome and I lost the appeal because the hearing officer stated that since this was the first time this employee had stolen from the company, they should be given as break as it was not a pattern of many thefts.  Now does that make any sense?  Do the police give you a break if it is your first time (getting caught) at stealing?  The system is very biased against employers, who by the way are carrying the entire cost of the program.  Did you know in Canada that employees have to pay half the taxes to support the unemployment system.

  • Anonymous

    From the article:

    “There have been bona fide job offers made to recipients of unemployment insurance and those job offers have been refused because the person has indicated they think they could do better staying on unemployment insurance,” he said. “Based on what I am hearing, this will be an issue before the Legislature when they are in session in January.”

    Clough said the issue has been discussed during the private sessions between employers and Gov. Paul LePage at his most recent job creation meetings. He is not aware of any study establishing how big a problem it is, but he said it needs to be addressed.

    I’ll wager that a study to verify that such claims are true has not been done, let alone one to determine “how big a problem it is.”

    This is all pure anecdotal evidence, not something on which policy or legislation should be based. Anecdotal evidence provided behind closed doors, away from the prying eyes of the media.

  • Anonymous

    It was passed last December, not two years ago, and is supposed to sunset at the end of this year.

  • http://pulse.yahoo.com/_NXPTPFL746OV2VGR5WBOEUF6W4 Roger

     The first time he was given a rubber check he should have QUIT and filed a complaint. This is not a unemployment matter it was a civil and criminal matter that should have been taken to the courts.

  • Anonymous

    He did just what the unemployment deputy told him he should have done, he gave the guy a chance to correct the problem in the event that it was a mistake in book keeping, which it was not. My point was why did it take six months to resolve? Things are very heavily weighted in favor of the employer at the DOL. I have been on both sides of the fence, so I have a little more perspective in the matter. If everyone bought American made products, we would not be having these problems in the first place. 

  • http://pulse.yahoo.com/_UDMNUBBIDWJLPI32ZUQAP5QMWE Wayno

    Although I feel for you and your plight, I do have to ask one question.  Why don’t you look for a job closer to home?   I have read in more than one article that companies are looking to hire currently working people or recently unemployed people, over people who have been out of work for a long period of time.  You are a working man, and many people, including myself, would love a job.  So make use of what you can put on a new resume, to find something closer and stop blaming Gov LePage for what’s going on in your life.

  • http://pulse.yahoo.com/_UDMNUBBIDWJLPI32ZUQAP5QMWE Wayno

    More efficient?  When you need to have surgery to repair your torn MCL, go to Canada and see how fast it gets done.  And ask the employees of those companies how much they pay in taxes towards the health care.  There are reasons why Canada only has a population of 34 million, and this is one of them.  And don’t say it’s all because of the climate.  Alaska has a population of over 700,000 alone, with no cities like Toronto, Montreal, Quebec, Ottawa, or Vancuver to help achieve that.

  • Anonymous

    I do NOT blame LePage or anyone else for MY choices.  I believe I stated that they are mine and I do own them. I’m sorry if you got that idea. What I blame him for (or credit him with on maybe one occasion) are the things that HE has chosen to do and the way he has chosen to do them. 
    I am constantly looking for a job closer to home. So are a ton of other people, like yourself. People with bachelors degrees are taking jobs that people with associate degrees qualify for.  People with associate’s are taking jobs that they could do with a high school diploma, but we all want to work.  I live in a rural area where houses aren’t moving (or I would sell mine) and jobs are scarce. I am a working WOMAN, thank you very much, and I do what I have to do.  I will plug along and at some point things will change. They will either get better or worse.  Until then, I am doing a good job where I am, looking for something better, and taking FULL responsibility for myself and my choices.  I’m not looking for sympathy, just comprehension.

  • Anonymous

    Thank you. I’m glad you found something better. I have no doubt that I will, too. With any luck it will be in time to stay out of trouble!

  • http://pulse.yahoo.com/_UDMNUBBIDWJLPI32ZUQAP5QMWE Wayno

    “Mr. LePage, you don’t know everything you need to know, and until you talk less, listen more, and throw in a good dose of common sense, you never will.”  This is a quote from your post, so it sounds to me like your blaming him.  Or maybe I got the idea form this part, ” I took the first job that was offered to me because I guess I thought like LePage (God help me!) and I didn’t feel like it was right or respectable to take “free” money if I was capable of working.” 

    I do apologies for assuming you were a man.  From your comment it sounded as such, and I misinterpeted it, so once again I apologies.  And I do agree with you also about how the job market is working right now (MB’s taking BA jobs, BA’s taking Associate jobs, etc.), but I blame the world wide economy as a whole right now, not our government.  Although I am no fan of our current President, I do not blame him and him alone for me, or the other hundreds of thousands, being out of work.

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