Governor Kay Ivey announced Alabama will be reallocating $300 million in CARES Act funds to Alabama’s unemployment insurance trust fund.
The funds will be used to offset shared costs, which are costs that are equally distributed to all tax-paying employers and can significantly increase employers’ unemployment insurance tax rates.
Based on preliminary calculations, without the transfer of the money, unemployment insurance tax rates for employers would increase by 508%. By adding the $300 million, this increase will be reduced to 200%, representing a new tax rate of 1.95%.
Additionally, beginning October 1, the Alabama Department of Labor will reinstate temporarily waived employer costs associated with COVID-19 related claims.