South Dakota House Bill HB1173

South Dakota 2024 Regular Session

• Introduced: 1/25/24
• Refer: 1/25/24

Caption

Revise unemployment insurance contribution rates.

Impact

The revision of these contribution rates is expected to have significant implications for employers in South Dakota. By instituting a tiered system for investment fee rates, the bill seeks to promote fiscal responsibility among employers by linking their contributions to their respective reserve ratios. This measure could lead to reduced financial burdens for employers with stronger financial positions while potentially increasing costs for those with weaker reserve ratios, thereby incentivizing them to maintain a healthy account balance.

Summary

House Bill 1173 aims to revise the unemployment insurance contribution rates for employers in South Dakota. The bill introduces a schedule of investment fee rates based on the reserve ratio of employers’ experience-rating accounts. Starting from January 1, 2024, employers will be subjected to varying fee rates depending on the state of their reserve ratio, with the highest rate set at 0.53% for those with a reserve ratio of less than 1.00%. This structured fee approach is intended to enhance the unemployment compensation trust fund's fiscal stability and ensure adequate funding for unemployment benefits.

Contention

Notable points of contention may arise regarding the fairness and practicality of the new fee structure. Some legislators might argue that the tiered rates could penalize struggling employers who are in need of more robust support during economic downturns. Others could express concern about the long-term sustainability of the unemployment fund, questioning whether the proposed rates will adequately cover potential unemployment claims as economic conditions fluctuate. The bill's supporters, however, may argue that it is a necessary adjustment to ensure the integrity and viability of the unemployment trust fund.