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The Minnesota Department of Employment and Economic Development has announced the taxable wage base for 2011. The wage base will remain at $27,000 for 2011.

New Employer Tax Rates to Increase

The tax rates for new employers will increase from 1.91% to 2.41% for new employers in non-high experience rating industries and will increase from 8.00% to 8.90% for new employers in high experience rating industries.

Federal Loan Interest Assessment Set at 2%

A federal loan interest assessment of 2% will take affect for 2011. This is calculated by multiplying the sum of the employer’s tax and “Additional Assessment” of 14% by 2%.

Find Out the Wage Base for All States by Visiting the Vision Payroll Unemployment Taxable Wage Base Page

Contact Vision Payroll if you have any questions on Minnesota unemployment taxable wage base or visit our Unemployment Taxable Wage Base page.

This week’s question comes from Peter, a company controller. I read that Michigan is a credit reduction state for 2010. Are there any other credit reduction states for 2010? Answer: Federal law provides for a reduction in the FUTA tax credit when a state has outstanding federal loans for two years. The credit reduction is calculated on Schedule A of Form 940.

South Carolina and Michigan Are the Credit Reduction States for 2010

In addition to Michigan, the South Carolina Department of Employment and Workforce has announced that South Carolina is also a FUTA credit reduction state for 2010.

Maximum Tax Increase Is $21 per Employee

Since this is South Carolina’s first year as a credit reduction state, the credit reduction will be 0.3% or a maximum of $21 per employee. This is calculated by multiplying the wage base of $7,000 by the credit reduction of 0.3%.

Michigan, South Carolina and Indiana Are Credit Reduction States for 2010

As noted elsewhere and in the comments, the three credit reduction states for 2010 are Michigan, South Carolina, and Indiana. Unless Congress changes the rules or states make significant changes, as many as thirty-eight states may be credit reduction states in 2011.

Vision Payroll Will Calculate the Credit Reduction for All South Carolina Clients

Contact Vision Payroll if you have any further questions on the South Carolina credit reduction.

According to the US Department of Labor, in the week ending November 13, the advance figure for seasonally adjusted initial claims was 439,000, an increase of 2,000 from the previous week’s revised figure of 437,000. The 4-week moving average was 443,000, a decrease of 4,000 from the previous week’s revised average of 447,000.

Advance Seasonally Adjusted Insured Unemployment Rate Decreases

The advance seasonally adjusted insured unemployment rate was 3.4% for the week ending November 6, a decrease of 0.1 percentage points from the prior week’s revised rate of 3.5%.

Advance Seasonally Adjusted Insured Unemployment Decreases

The advance number for seasonally adjusted insured unemployment during the week ending November 6 was 4,295,000, a decrease of 48,000 from the preceding week’s revised level of 4,343,000. The 4-week moving average was 4,353,250, a decrease of 45,500 from the preceding week’s revised average of 4,398,750.

A clear, well-written company employee handbook is crucial to your business. Look closely at your company practices and make sure you have at least the minimum crucial types of policies in place to communicate to your employees and protect your business.

Three Questions to Refine Your Handbook

1. What should we include in the handbook?
2. What should we exclude from the handbook?
3. What general steps should we keep in mind?

Get Help Refining Your Employee Handbook Now

To obtain more information about each of these items, be sure to listen to Bulletproofing Your Company Employee Handbook in this month’s HRCast, a recording provided by our team of HR Pros and available exclusively on MyHRSupportCenter.

MyHRSupportCenter Provides Alerts, Best Practices, and HR Tools Every Day

Visit MyHRSupportCenter regularly, not only for our HRCasts, but also to get late-breaking compliance alerts, best practices to implement, and HR tools to use every day. If you haven’t yet signed up and would like a free trial of MyHRSupportCenter, contact Vision Payroll today.

According to the Unemployment Insurance Agency of the State of Michigan Department of Energy, Labor & Economic Growth, the FUTA tax credit reduction rate will increase from 0.3% in 2009 to 0.6% in 2010.

Standard Credit Rate is 5.4% for 2010

Generally, employers who pay their state unemployment tax by the due date for filing Form 940, Employer’s Annual Federal Unemployment (FUTA) Tax Return receive a credit 5.4% against their Federal Unemployment Tax Act (FUTA) tax. This credit is claimed on Form 940.

FUTA Wage Base is $7,000 for 2010

Since the FUTA wage base is $7,000 for 2010, a maximum tax of $56 per employee is due, calculated as follows:

FUTA Taxable Wage Base
FUTA Taxable Wage Base	$7,000
FUTA Tax Rate	6.2%
Maximum FUTA Tax per Employee Before Credit $434.00	$434
Less: FUTA Tax Credit Reduction ($7,000 X 5.4%)	$378
Maximum Net FUTA Tax per Employee	$56

Employers in Certain States Are Subject To Credit Reduction

Federal law provides for a reduction in the FUTA tax credit when a state has outstanding federal loans for two years. The credit reduction is calculated on Schedule A of Form 940.

Michigan Is Subject To Credit Reduction for Second Consecutive Year

Since Michigan was already subject to a credit reduction in 2009 of 0.3%, the credit reduction will increase to 0.6% for 2010. The credit reduction will continue to increase by 0.3 percentage points each year until the loan is paid, e.g., 0.9% in 2011, 1.2% in 2012, etc.

Vision Payroll Will Calculate the Credit Reduction for All Michigan Clients

Contact Vision Payroll if you have any further questions on the Michigan credit reduction.

The Colorado Department of Labor and Employment has announced that since the UI Trust Fund balance as a percentage of the total wages reported by ratable Colorado employers was less than zero, the solvency surcharge would be assessed for rate year 2011.

UI Trust Balance Must Not Be Less than 0.9% of Total Wages

Whenever the UI Trust Fund balance is less than nine-tenths of one percent of the total wages reported by ratable Colorado employers, the solvency surcharge remains in effect.

Only Certain Employers Are Assessed the Solvency Surcharge

The solvency surcharge is not assessed to state and local government agencies, reimbursable and group-rated political subdivisions, and nonprofit organizations that are reimbursable employers.

Colorado Wage Base to Remain at $10,000 for 2011

The taxable wage limit is $10,000 per employee in 2011.

Find Out the Wage Base for All States by Visiting the Vision Payroll Unemployment Taxable Wage Base Page

Contact Vision Payroll if you have any questions on the Colorado unemployment taxable wage base or visit our Unemployment Taxable Wage Base page.

The California Employment Development Department (EDD) recently released the 2011 UI, ETT, and SDI rates. An historical compilation of prior year rates is available in Form DE 3395.

2011 UI, ETT, and SDI Rates

The UI rate schedule in effect for 2011 is Schedule “F+.” This is Schedule F plus a 15% emergency surcharge, rounded to the nearest tenth. Schedule “F+” provides for UI contribution rates from 1.5% to 6.2%.

Exception for Employers Subject to §977(c)

Exception: Employers subject to §977(c) of the CUIC must pay at the highest rate provided by law plus an additional 2%.

Taxable Wage Limit Remains at $7,000

The taxable wage limit is $7,000 per employee.

The Voluntary UI program Is Not in Effect for 2011

The Employment Training Tax (ETT) rate for 2011 is 0.1%. The UI and ETT taxable wage limit remains at $7,000 per employee per calendar year.

SDI Rate Is Set at 1.2%

The State Disability Insurance (SDI) withholding rate for 2011 is 1.2%. The taxable wage limit is $93,316 for each employee per calendar year. The maximum to withhold for each employee is $1,119.79.

Notices Will Be Mailed December 31

UI, ETT, and SDI tax rates are combined on a single rate notice, Notice of Contribution Rates and Statement of UI Reserve Account (DE 2088). The DE 2088 will be mailed in December, with a mailing date of December 31. Employers will have 60 days from the December 31 mailing date to protest any item on the DE 2088 except SDI and ETT, which are specifically set by law.

New Employer Rate Set at 3.4%

For new employers, the UI tax rate is 3.4% for up to three years. Owners that purchased an established business have the option of acquiring the previous owner’s UI tax rate.

Find Out the Wage Base for All States by Visiting the Vision Payroll Unemployment Taxable Wage Base Page

Contact Vision Payroll if you have any questions on the California unemployment taxable wage base or visit our Unemployment Taxable Wage Base page.

Adjustment Is Tied to Changes in CPI-W

The adjustment is tied to the change in the federal Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) for the 12 months ending in August. The 1.4% increase in the CPI-W will result in an increase of $0.12 for 2011.

Attorney General Rob McKenna Concluded Minimum Wage Should Not Increase

In legal opinion AGO 2010 No. 7, the Washington State Office of the Attorney General concluded that since there was a net decrease in CPI-W since August 2008, the minimum wage should remain unchanged for 2011. Since several groups have filed suit challenging the increase in the minimum wage, it is likely that courts will be required to provide the final answer as to how the minimum wage should change, if at all, for 2011.

Find Out the Minimum Wage for All States by Visiting the Vision Payroll Minimum Wage Chart Page

Contact Vision Payroll if you have any questions on the Washington minimum wage increase or visit our Minimum Wage Chart.

This week’s question is from Randy, an HR Manager. We are reviewing our payroll processing schedule for 2011. What is the holiday schedule for 2011? Answer: There are two types of holidays: those on which payrolls are processed and those on which payrolls are not processed. In addition, companies should also consider that there is no mail pickup or delivery on federal holidays.

UPS Holiday Delivery Schedule Varies

UPS may pickup and deliver on certain holidays, but may not pickup or deliver on other days that are not holidays. Consult the UPS website for further information. The schedule for 2011 holidays is as follows:

Date	Holiday	Federal Reserve Holiday	Payrolls Processed
1/1/2011	New Year's Day	Yes	No
1/17/2011	Birthday of Martin Luther King, Jr.	Yes	Yes
2/21/2011	Washington's Birthday	Yes	Yes
5/30/2011	Memorial Day	Yes	No
7/4/2011	Independence Day	Yes	No
9/5/2011	Labor Day	Yes	No
10/10/2011	Columbus Day	Yes	Yes
11/11/2011	Veterans Day	Yes	Yes
11/24/2011	Thanksgiving Day	Yes	No
12/26/2011	Christmas Day (Observed)	Yes	No

Visit VisionPayroll.com for Further Details on Individual Holidays

Contact Vision Payroll if you have any questions on the 2011 holiday schedule and be sure to check VisionPayroll.com for further details as each holiday approaches.

According to the US Department of Labor, in the week ending November 6, the advance figure for seasonally adjusted initial claims was 435,000, a decrease of 24,000 from the previous week’s revised figure of 459,000. The 4-week moving average was 446,500, a decrease of 10,000 from the previous week’s revised average of 456,500.

Advance Seasonally Adjusted Insured Unemployment Rate Decreases

The advance seasonally adjusted insured unemployment rate was 3.4% for the week ending October 30, a decrease of 0.1 percentage points from the prior week’s revised rate of 3.5%.

Advance Seasonally Adjusted Insured Unemployment Decreases

The advance number for seasonally adjusted insured unemployment during the week ending October 30 was 4,301,000, a decrease of 86,000 from the preceding week’s revised level of 4,387,000. The 4-week moving average was 4,388,250, a decrease of 35,750 from the preceding week’s revised average of 4,424,000.