On October 31, 2014, the South Carolina Department of Employment and Workforce (DEW) released the 2015 unemployment insurance tax rates. Unemployment insurance tax rates for wages paid between January 1, 2015 and December 31, 2015 will drop approximately 9%, according to the S.C. DEW. Favorable economic conditions and a strong labor market have contributed to the reduction.
“The economy continues to improve, South Carolinians continue to find work and tax rates continue to decline,” said Cheryl M. Stanton, Executive Director of the S.C. Department of Employment and Workforce. “This is truly a testament to the efforts of our state’s business community and workforce development.”
Employers should receive a Notice of Contribution Rate this month, approximately six months before their first payment is due. Wage and Contribution reports are due by April 30, 2015. The 2015 rates now apply to the first $14,000 of an individual’s taxable wages, rather than $12,000 as in prior years.
The S.C. Department of Employment and Workforce is responsible for the collection, accounting and auditing functions for the South Carolina Unemployment Insurance tax program. Existing or experience-rated employers are assigned a rate classification based on the employer’s history or usage of the unemployment insurance system which is listed on the annual Notice of Contribution Rate. Under South Carolina law, the tax rate per classification category adjusts automatically each year based on a formula that considers the (1) projected benefit costs for the year; (2) amount of outstanding loans from the federal government; and (3) interest owed to the federal government. An employer is also responsible for a Departmental Administrative Contingency Assessment surcharge of 0.06 percent. To date, South Carolina has repaid approximately $700 million of the $977 million borrowed from the federal government and is scheduled to repay the loan by the end of 2015, thus potentially reducing tax rates again in the future.
South Carolina laws governing the tax rate assignment are not subject to appeal. If an employer disagrees with any of the historical information contained in a Notice of Contribution Rate, the employer may submit a written request for a review within thirty (30) days from the date of the notice.
If you have any questions or comments regarding this article, the unemployment insurance program or your individual rate classification, please contact the author.