Department of Labor and Training Announces Unemployment Insurance Tax Rates for 2022

Published on Monday, December 20, 2021

CRANSTON, R.I. – The Department of Labor and Training (DLT) today announced that tax rates for the Unemployment Insurance (UI) program will remain at Schedule H in 2022.

UI tax rates are calculated using a statutory formula based on the balance of the state’s employment security fund. Because of the high number of unemployment claimants in 2021 resulting from the COVID-19 pandemic, the UI trust fund was more heavily utilized than in previous years.

To help prevent an increase in taxes for Rhode Island employers, Governor Dan McKee issued Executive Order 21-102 providing the Department with flexibility in deciding the calculation date for the new tax rates. This allowed for the UI trust fund to accumulate a sufficient balance before the new rates were calculated in November.

As a result of this action, Schedule H with rates ranging from 1.2 percent to 9.8 percent will remain in effect throughout calendar year 2022. The rate for new employers, which is based on the State's five-year benefit cost rate for new employers, will be 1.19 percent. These rates include the 0.21 percent Job Development Assessment.

Governor McKee also issued Executive Order 21-117, allowing the Department to hold the UI taxable wage base at the same level as it was in 2021. Accordingly, in 2022 the UI taxable wage base for most Rhode Island employers will remain at $24,600. For those employers at the highest tax rate, the UI taxable wage base will be set $1,500 higher at $26,100.

The UI taxable wage base is set at 46.5 percent of the average annual wage of workers at taxable employers. For 2021, this was calculated using average annual wage data for calendar year 2019. Given that the unprecedented pandemic-related job losses in 2020 disproportionately impacted lower wage earners, using the average annual wage for 2020 would have raised the taxable wage base to a level inconsistent with current economic conditions.

DLT also announced that the Temporary Disability Insurance (TDI) contribution rate will be 1.1 percent for calendar year 2022; in 2021, the TDI contribution rate was 1.3 percent. The TDI taxable wage base, which is equal to the annual earnings needed by an individual to qualify for the maximum weekly benefit rate, will be $81,500 in 2022, an increase of $7,500 from the 2021 taxable wage base of $74,000.

Unemployment Insurance provides temporary income support to workers who have lost their jobs through no fault of their own and have sufficient wages in the base period to meet the monetary requirements. Worker benefits are funded entirely from state and federal UI taxes paid by Rhode Island employers.

TDI protects workers against wage loss due to a non-work-related illness or injury, and through Temporary Caregiver Insurance (TCI), which provides up to four weeks of payments to bond with a new child or to care for a seriously ill family member. TCI is not a separate state program; TCI is part of the TDI program. TDI is paid by employees, not employers, through a payroll tax.

###