Businesses that lay off the most employees would pay the most in employment taxes under a new plan state lawmakers have approved.
Gov. Mark Sanford is expected to sign off on the bill, which would then go into effect Jan. 1.
Under the plan:
The state's busted unemployment insurance trust fund would become solvent again by 2015.
Never miss a local story.
Nearly $1 billion the state owes the federal government would be repaid by 2021.
A roughly $1 billion reserve fund would be created to ensure the state has extra cash on hand so it can pay out unemployment benefits to laid off workers during future recessions.
The bill is one of in a series of reforms at the former Employment Security Commission, now called the Department of Employment and Workforce, which oversees the trust fund that pays unemployment benefits to South Carolinians who lose their jobs. The fund went broke in 2008, forcing the state to borrow money from the federal government ever since to pay unemployment benefits.
The fund is supported by the state's businesses that pay an annual tax on each of their employees.
The new tax system, which 11 other states already use, functions like most other insurance funds, including car insurance. It rewards employers who don't lay off workers with reduced employment taxes.
"How much a business pays (in employment taxes) depends on how much they use the (unemployment benefits) system," said House Majority Leader Rep. Kenny Bingham, R-Lexington. "The more they use it, the more they pay. The less they use it, the less they pay."
Under the bill, the state's businesses would be divided into 20 categories based on how much they use the unemployment benefit system compared with other companies' use.
To read the complete article, visit www.thestate.com.