2005 Idaho Code - 72-1350 — TAXABLE WAGE BASE AND TAXABLE WAGE RATES

                                  TITLE  72
                      WORKER'S COMPENSATION AND RELATED
                        LAWS -- INDUSTRIAL COMMISSION
                                  CHAPTER 13
                           EMPLOYMENT SECURITY LAW
    72-1350.  TAXABLE WAGE BASE AND TAXABLE WAGE RATES. (1) All remuneration
for personal services as defined in section 72-1328, Idaho Code, equal to the
average annual wage in covered employment for the penultimate calendar year,
rounded to the nearest multiple of one hundred dollars ($100), or the amount
of taxable wage base specified in the federal unemployment tax act, whichever
is higher, shall be the taxable wage base for purposes of this chapter.
    (2)  Prior to December 31 of each year, the director shall determine the
taxable wage rates for the following calendar year for all covered employers,
except cost reimbursement employers, in accordance with this section, provided
however, and notwithstanding any other provision of the employment security
law to the contrary, for calendar years 2005 and 2006, the taxable wage rates
for all covered employers except cost reimbursement employers shall be
determined as follows:
    (a)  For calendar year 2005, the taxable wage rate shall be determined
    using a base tax rate of one and fifty hundredths percent (1.50%);
    (b)  For calendar year 2006, the taxable wage rate shall be determined
    using a base tax rate of one and sixty-seven hundredths percent (1.67%)
    unless, at any time prior to September 30, 2005, the actual balance in the
    employment security fund, section 72-1346, Idaho Code, is fifty percent
    (50%) or less than the actual balance in the reserve fund, section
    72-1347A, Idaho Code, in which case the taxable wage rate shall be
    determined using a base tax rate calculated in accordance with subsection
    (5) of this section.
    (3)  An average high cost ratio shall be determined by calculating the
average of the three (3) highest benefit cost rates in the twenty (20) year
period ending with the preceding year. For the purposes of this section, the
"benefit cost rate" is the total annual benefits paid, including the state's
share of extended benefits but excluding the federal share of extended
benefits and cost reimbursable benefits, divided by the total annual covered
wages excluding cost reimbursable wages. The resulting average high cost ratio
is multiplied by the desired fund size multiplier of eight-tenths (0.8), and
the result, for the purposes of this section, is referred to as the "average
high cost multiple" (AHCM).
    (4)  The fund balance ratio shall be determined by dividing the actual
balance of the employment security fund, section 72-1346, Idaho Code, and the
reserve fund, section 72-1347A, Idaho Code, on September 30 of the current
calendar year by the wages paid by all covered employers in Idaho, except cost
reimbursement employers, in the preceding calendar year.
    (5)  The base tax rate shall be determined as follows:
    (a)  Divide the fund balance ratio by the AHCM;
    (b)  Subtract the quotient obtained from the calculation in paragraph
    (5)(a) of this section from the number two (2);
    (c)  Multiply the remainder obtained from the calculation in paragraph
    (5)(b) of this section by two and one-tenth percent (2.1%). The product
    obtained from this calculation shall equal the base tax rate, provided
    however, that the base tax rate shall not be less than sixty-three
    hundredths percent (0.63%) and shall not exceed three and thirty-six
    hundredths percent (3.36%).
    (6)  The base tax rate calculated in accordance with subsection (5) of
this section shall be used to determine the taxable wage rate effective the
following calendar year for all covered employers except cost reimbursement
employers as provided in subsections (7) and (8) of this section.
    (7)  Table of Rate Classes, Tax Factors and Minimum and Maximum Taxable
Wage Rates
           Cumulative Taxable Payroll Limits   Eligible Employers
           More Than      Equal to               Minimum     Maximum
             (% of      or Less Than             Taxable     Taxable
 Rate       Taxable     (% of Taxable   Tax       Wage        Wage
 Class      Payroll)      Payroll)    Factor      Rate        Rate
           More Than      Equal to               Minimum     Maximum
             (% of      or Less Than             Taxable     Taxable
 Rate       Taxable     (% of Taxable   Tax       Wage        Wage
 Class      Payroll)      Payroll)    Factor      Rate        Rate
  1            --          12         0.2857      0.180%      0.960%
  2            12          24         0.4762      0.300%      1.600%
  3            24          36         0.5714      0.360%      1.920%
  4            36          48         0.6667      0.420%      2.240%
  5            48          60         0.7619      0.480%      2.560%
  6            60          72         0.8571      0.540%      2.880%
  7            72          --         0.9524      0.600%      3.200%

                                               Standard-Rated Employers
                                                 Minimum     Maximum
                                                 Taxable     Taxable
                                        Tax       Wage        Wage
                                      Factor      Rate        Rate
                                       1.000      1.000%      3.360%

           Cumulative Taxable Payroll Limits   Deficit Employers
           More Than      Equal to               Minimum     Maximum
             (% of      or Less Than             Taxable     Taxable
 Rate       Taxable     (% of Taxable   Tax       Wage        Wage
 Class      Payroll)      Payroll)    Factor      Rate        Rate
  -1           --          30         1.7143      1.080%      4.800%
  -2           30          50         1.9048      1.200%      5.200%
  -3           50          65         2.0952      1.320%      5.600%
  -4           65          80         2.2857      1.440%      6.000%
  -5           80          95         2.6667      1.680%      6.400%
  -6           95          --         2.6667      5.400%      6.800%
    (8)  Each covered employer, except cost reimbursement employers, will be
assigned a taxable wage rate and a contribution rate as follows:
    (a)  Each employer, except standard-rated employers, will be assigned to
    one (1) of the rate classes for eligible and deficit employers provided in
    subsection (7) of this section based upon the employer's experience as
    determined under the provisions of sections 72-1319, 72-1319A, 72-1351 and
    72-1351A, Idaho Code.
    (b)  For each rate class provided in subsection (7) of this section, the
    department will multiply the base tax rate determined in accordance with
    subsection (5) of this section by the tax factor listed for that rate
    class in the table provided in subsection (7) of this section. The product
    obtained from this calculation shall be the taxable wage rate for
    employers assigned to that rate class, provided however, that the taxable
    wage rate shall not be less than the minimum taxable wage rate assigned to
    that rate class and shall not exceed the maximum taxable wage rate
    assigned to that rate class in the table provided in subsection (7) of
    this section.
    (c)  For standard-rated employers, the department will multiply the base
    tax rate determined in accordance with subsection (5) of this section by
    the tax factor listed for standard-rated employers in the table provided
    in subsection (7) of this section. The product obtained from this
    calculation shall be the taxable wage rate for standard-rated employers,
    provided however, that the taxable wage rate shall not be less than the
    minimum taxable wage rate assigned to standard-rated employers and shall
    not exceed the maximum taxable wage rate assigned to standard-rated
    employers in the table provided in subsection (7) of this section.
    (d)  Deficit employers who have been assigned a taxable wage rate from
    deficit rate class six will be assigned contribution rates equal to their
    taxable wage rate.
    (e)  All other eligible, standard-rated and deficit employers will be
    assigned contribution rates equal to ninety-seven percent (97%) of their
    taxable wage rate. Provided however, that for each calendar year a reserve
    tax is imposed pursuant to section 72-1347A, Idaho Code, the contribution
    rates for employers assigned contribution rates pursuant to this paragraph
    shall be eighty percent (80%) of their taxable wage rate.
    (9)  Each employer shall be notified of his taxable wage rate as
determined for any calendar year pursuant to this section and section 72-1351,
Idaho Code. Such determination shall become conclusive and binding upon the
employer, unless within fourteen (14) days after delivery or mailing of the
notice thereof to his last known address, the employer files an application
for redetermination, setting forth his reasons therefor. Reconsideration shall
be limited to transactions occurring subsequent to any previous determination
which has become final. The employer shall be promptly notified of the
redetermination, which shall become final unless an appeal is filed within
fourteen (14) days after delivery or mailing of notice to his last known
address. Proceedings on the appeal shall be in accordance with the provisions
of section 72-1361, Idaho Code.