New Mexico's governor recently signed legislation that will overhaul the state's unemployment insurance program. Under the new measure, businesses in the state may see a change in the rate they have to pay, as New Mexico looks to take the politics out of its unemployment insurance program.
Gives power to state agency
Gov. Susana Martinez signed into law a bill that undertakes a substantial reform of New Mexico's jobless benefits setup. The key element of the legislation will empower the state's Department of Workforce Solutions to set the tax rates at which state businesses pay to fund the unemployment compensation program.
Previously, such a task had been left to the governor and the legislature, which had to negotiate over setting such tax rates. The legislation was introduced in an bid to remove the political factor from the equation and standardize the process.
"Politicians in Santa Fe shouldn't be using an unfair and arbitrary rate structure to change costs on businesses year after year," Martinez said. "That's not predictable, and it's far too political. With these reforms, we are taking politics out of the management of the unemployment fund and making it a true insurance system that is more predictable and fair for New Mexico small businesses."
The new configurations implemented by the law will automatically set rates by weighing a variety of factors. For example, businesses with high turnover could pay a steeper rate, or if their unemployment claims are greater than the amount the employer has paid into the fund.
The Albuquerque Journal reported the Department of Workforce Solutions would also set rates based on what industry the company is in, as well as how much experience the firm has in business. The newspaper also cited a Legislative Finance Committee report that found the new UI program structure would lead to a rise in an employer's premium by 0.21 percent, on average.
Tax rates will stay the same for New Mexico businesses through 2014, but will see changes in 2015.
"There is no other bill that will so positively, effectively and quickly help business like this one does," said Terri Cole, CEO of the Greater Albuquerque Chamber of Commerce. "The bill ensures long-term fund solvency, avoids massive and arbitrary increases, and eliminates political interference."
Employers trying to cope with shifting UI obligations and revamped programs can seek out an HR service provider to help streamline benefit-paying and claim-handling operations.
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Image credit: Jandy Smith