A strong economy in California has allowed the state to finally pay off its federal unemployment insurance loans. This means that the state federal unemployment tax (FUTA) rates should go back to the minimum rates by the end of 2018.
Fortunately for the vast majority of businesses in America, relatively few are directly impacted by severe weather disasters or other life and property threatening natural events. But no business owner is exempt from the possibility, and every employer has obligations during such events.
The U.S. Department of Labor recently announced that employers in the state of California and in the Virgin Islands will pay their Federal Unemployment Tax Act, or FUTA, taxes for calendar year 2016 at a higher tax rate than employers in other states.
Employers in four jurisdictions are likely to see Federal Unemployment Tax Act credit , or FUTA, reductions for 2016, according to the U.S. Labor Department.
It's a sobering reality in California: labor law requires that the FUTA tax rates will continue to increase. The projection of increases through 2018 is also a sobering reminder of the fiscal state of California.