Democratic Governor Phil Bredesen of Tennessee recently signed HB2324/SB2315 into law. Under the newly-enacted legislation, the 2009 wage base is increased from $7,000 to $9,000 retroactively to January 1, 2009. The wage base will remain at $9,000 until the trust fund balance exceeds $900 million, decrease to $8,000 if the trust fund balance exceeds $900 million but not $1 billion, and decrease to $7,000 if the trust fund balance exceeds $1 billion. Also, an additional fee of 0.6% on all unemployment insurance premium rates on Premium Tables 1, 2, and 3 is imposed as well. The additional tax will stay in place until the trust fund balance equals or exceeds $650 million.

Employers should report the additional wages from quarter one on their quarter two form or if their payroll accounting system does not allow this, employers may amend their quarter one filing.

According to James G. Neeley, Commissioner of the Tennessee Department of Labor and Workforce Development (the Agency), the Agency will send an “Employer Statement” that shows the balance due from quarter one because of the increase in tax rates. He also pledged that the Agency would administer the legislation “in as efficient and equitable a manner as possible.”

Contact Vision Payroll for assistance if you’re impacted by the changes in Tennessee unemployment law.