The New Jersey Department of Labor and Workforce Development announced that state unemployment insurance contributions have surpassed initial projections, allowing for the UI tax rate paid by businesses to be reduced as of the new fiscal year starting July 1.
The UI contribution rate for employers will transition to “Column C,” with a range of 0.5 percent to 5.8 percent, from the current “Column D” rate, ranging from 0.6 percent to 6.4 percent. This shift is expected to generate substantial savings for employers, totaling an estimated $300 million in the coming fiscal year.
“The unemployment insurance tax reduction demonstrates a major milestone in New Jersey’s economic recovery following the COVID-19 pandemic,” Gov. Phil Murphy said. “We are now able to ease employers’ burdens while continuing to strengthen our workforce. This progress reflects our ongoing commitment to create a robust economy that supports our employees.”
“This is significant news for both the state and its employers and highlights the strength and resilience of New Jersey’s economy,” Labor Commissioner Robert Asaro-Angelo said. “The reduction in employer contribution rates underscores our state’s forward momentum and commitment to fostering job creation and economic growth.”
“The reduction in the UI tax rate effective July 1 is welcome news for New Jersey companies. The estimated $300 million in savings will give many businesses a critical opportunity to reinvest in their operations, support their workforce, and strengthen their communities. At a time of continued economic uncertainty, this relief couldn’t come at a better moment for employers who are already facing significant financial pressures,” Tom Bracken, president and CEO, New Jersey Chamber of Commerce said.
Employer contribution rates to the Unemployment Insurance (UI) Trust Fund depend on two factors. First, the overall health of the fund determines which column of the UI tax table applies to all New Jersey employers. Second, each employer’s history with unemployment claims sets their specific rate within that column. The tax tables are set in statute by the New Jersey Unemployment Compensation Law and automatically update each fiscal year based on the fund’s status, ensuring rates reflect both state-wide and individual circumstances.
This lowering of the UI contribution rate for businesses indicates significant recovery for the UI Trust Fund, which was heavily impacted by an unprecedented surge in claims during the COVID-19 pandemic, during which NJDOL delivered nearly $40 billion in benefits to 1.6 million workers over 21 months.
