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Under new law, Hawaii businesses spared big unemployment tax hikes

Updated: Mar. 2, 2021 at 9:36 PM HST
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HONOLULU, Hawaii (HawaiiNewsNow) - There will be no major unemployment tax hikes for businesses this year after the governor signed a measure that will ultimately prevent companies from having to replenish the unemployment system.

The measure allows businesses to average less than half of what they would otherwise have to pay into the unemployment system.

Without this intervention, the highest tax rate would have been in effect for 2021. The average tax on employers would have been $1,800 per employee.

[Read a previous report: Hawaii businesses face huge unemployment insurance tax hikes]

But instead, what they’ll pay has now been reduced for next year to $850 annually per employee. The highest current rate is about $630.

Gov. David Ige says the measure will ensure more businesses will be able to survive the ongoing economic crisis, and rehire employees once they can return to work safely.

Businesses pushed for the change, saying they couldn’t handle more expenses.

”It’s been a very unpredictable year – and in business, that’s not good,” owner of Waioli Kitchen & Bake Shop Ross Anderson said.

“We face all manners of different changes, many of them coming with very little notice. And this gives us one measure of stability in an area that was largely out of our control. So that was very significant.”

Sherry Menor-McNamara, president and CEO of the Hawaii Chamber of Commerce sees this as one solution, but hopes Congress will allocate monies to the states to help create more assistance programs for businesses.

“Which, in turn, will allow them to make jobs available, add more jobs, and continue to provide benefits to their employees,” said Menor-Mcnamara.

The governor says he’s relying on the federal government to fill a huge deficit in the unemployment fund.

Meanwhile, the Department of Labor and Industrial Relations (DLIR) implemented a “bot blocker,” with hopes of the program helping them serve more people.

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