Committee briefed on mechanics behind Vermont unemployment-insurance trust fund and solvency levers

The Vermont Hills Committee on Commerce & Economic Development spent its May 6 meeting getting a detailed briefing on how the state’s unemployment-insurance (UI) trust fund is financed, how employer tax rates are set and what officials can do to shore up solvency if the economy weakens.

Michael Harrington, commissioner of the Vermont Department of Labor, told the committee that UI "is to provide partial wage replacement for those who become unemployed through no fault of their own" and emphasized the committee’s role in protecting the trust fund that pays benefits.

The briefing focused on three levers that most directly affect fund health: the taxable wage base (the portion of an employee’s wages subject to employer UI tax), the state tax-schedule mechanics that set employer rates, and benefit payouts. "You'll hear Matt share and use a term called taxable wage base," Harrington said, noting the current taxable wage base used for contributions is $14,800 per employee, per year.

Matthew Berwitz, director of the Economic and Labor Market Information Division at the Vermont Department of Labor, described how the fund earns interest and how that income helps…