Understanding Connecticut’s Unemployment Changes for 2024

Like many states, Connecticut was burdened by a high volume of Covid-19 claims, benefit charges and federal borrowing. Increases in backlogs and UI fraud have also been a struggle. To improve the state’s UI Trust Fund and build long term sustainability, Public Acts 21-200 and 22-67 have been passed.

UTCA has worked closely with the CT DOL to track this legislation and the agency’s rollout. Key changes include reforms to the tax and benefit system, indexing of taxable wage bases and freezing of maximum benefits. These reforms have been designed to ensure Trust Fund Solvency and limit punitive increases in employer liability, such as supplemental tax factors.

Here is a highlight of the upcoming reforms set to take place by 1/1/2024:

UI Tax Changes

  • The Taxable Wage Base (TWB) increases from $15,000 to $25,000. Thereafter, it will be indexed annually tied to inflation. Increases will be indexed by using the Employment Cost Index as opposed to the Cost-Price Index, which is typically less aggressive and more stable.
  • To minimize the short-term impact of the TWB increase, charged rates in calendar years 2024, 2025, 2026, and 2027 will be reduced by factors of 1.471, 1.269, 1.125, and 1.053 respectively.
  • The state’s minimum rate will be reduced from 0.5% to 0.1%.
  • The state’s maximum rate increases from 5.4% to 10.0%.
  • The state’s maximum fund solvency tax rate is reduced from 1.4% to 1.0%. The maximum fund solvency tax rate is further reduced to 0.5% during years in which an economic recession has been declared.
  • Benefit ratio adjustment: If the average benefit ratio of all employers within a sector of the North American Industry Classification System (NAICS) increases by 1% or more over the average benefit ratio of that sector from the previous year, then the benefit ratio of each employer within such sector shall have their individual benefit ratio reduced by one-half of the increase.

UI Benefit Changes

  • Benefits paid to a claimant through the state’s voluntary Shared Work program during periods of high unemployment shall not be charged to experience rated base period employers.
  • In all cases, a claimant’s receipt of severance pay will now result in disqualification from receiving UI benefits for the period covered by the payment.
  • A claimant’s receipt of accrued vacation pay at the time of dismissal will not disqualify the claimant from receiving UI benefits, if otherwise eligible. However, vacation pay issued to a claimant during a shutdown period will result in a disqualification or reduction in the UI benefits.
  • The minimum weekly UI benefit payment will increase from $15 to $40 and will be subsequently indexed annually tied to inflation. However, the minimum benefit will revert to $15 when the federal government provides a fully federally funded supplement to the individual’s weekly benefit amount. The minimum base period earnings requirement increases from $600 to $1,600 and will be subsequently indexed annually to inflation. However, the minimum base period earnings requirement will revert to $600 when the federal government provides a fully federally funded supplement to the individual’s weekly benefit amount.
  • Each day of absence without either good cause or notice to the employer constitutes a “separate instance” of willful misconduct. Traditionally, the CT DOL has treated multiple instances in the same period as one instance i.e., a Monday through Friday, or series of days “no-call, no-show” constituted only one policy violation. This change makes attendance separations less challenging for employers, in line with other states.
  • Additionally, the maximum UI benefit rate will be frozen during the four years from October 2024 through October 2028


What does it all mean?

UTCA lauds Connecticut’s pro-active effort to update their UI system with consideration for employers and an eye on system sustainability. The increase in the taxable wage base will be a significant change that may have an economic impact on businesses’ bottom line, but the applied decrease in the charged rate should help alleviate the impact of these changes. Ultimately, the businesses previously operating at a near-max rate will feel the additional cost burden most.

Now more than ever, the ability to take control of benefit charges should be a top priority. Opportunities to protest and avert charges from increasing the charged rate will be the key to keeping UI costs low. UTCA will continue to capitalize on every available protest on their client’s behalf to safeguard their bottom line. If you’re a CT-based employer struggling to manage your unemployment now, or concerned about how the new reforms might impact your business, feel free to contact us here!