CRANSTON, RI — The RI Department of Labor and Training announced today that the 2016 Unemployment Insurance (UI) taxable wage base will be $22,000 for most employers in Rhode Island. This represents a $800 increase from the current year. By law, the UI taxable wage base represents 46.5 percent of the average annual wage in Rhode Island.
Although the wage base limits the amount of wages that are taxable, tax rates for individual employers vary according to their experience with the UI system. These rates range from a minimum of 1.69 percent to a maximum of 9.79 percent. The lower an employer’s “experience rate,” the less tax the employer pays. Employers will be notified of their new individual tax rates in December. The 2016 rate for new employers will be 2.27 percent, a decrease of 0.47 of a percentage point from the 2015 rate.
The 2016 taxable wage base for those employers in the highest UI tax rate (9.79 percent) group will be $23,500 — $1,500 greater than the taxable wage base for all other employers, per RI law. This higher wage base, which affects approximately 15 percent of RI experience-rated employers, is intended to help offset the large drain these employers have on the Employment Security Trust Fund. Last year, 30 percent of all UI benefit payments were attributed to the top 15 percent of RI experience-rated employers.
The Employment Security Fund, financed by assessments from 32,200 businesses in the state, covers the cost of Unemployment Insurance benefits for RI workers. The fund’s taxable wage base represents the maximum amount of an employee’s earned wages that are subject to taxation in any given year.
DLT also announced today that the employee contribution rate to the Temporary Disability Insurance (TDI) Fund will remain at 1.2 percent in 2016. The TDI contribution rate has remained unchanged since 2012. The contribution rate is calculated by dividing total adjusted fund disbursements for a 12-month period by taxable wages for a 12-month period.
Also in 2016, the TDI taxable wage base will be $66,300, an increase of $2,100 over last year’s taxable wage base. The maximum TDI contribution will be $795.60 next year, an increase of $25.20 from the 2015 maximum contribution of $770.40. TDI provides benefit payments to insured RI workers for weeks of unemployment caused by disability. Last year, approximately 403,000 workers contributed to the TDI fund. RI workers, not employers, fund the TDI system.
On July 11, 2013, Rhode Island signed into law the Temporary Caregiver Insurance (TCI) program, which can provide eligible claimants with up to four weeks of caregiver benefits to care for a seriously ill child, spouse, domestic partner, parent, parent-in-law or grandparent or to bond with a newborn child, new adopted child or new foster-care child.
TCI is Temporary Disability Insurance for TCI purposes. It is not a separate program run by the state. DLT’s TDI staff handle all TCI claims. Through October, 2015, TCI claims accounted for about 16 percent of the total number of initial TDI applications filed with DLT.