Starting next year, the Maine Department of Labor is raising unemployment insurance premiums to replenish the state’s unemployment coffers, which have been strained by increased unemployment claims from out-of-work job seekers.

The agency said Monday that annual premiums for businesses will increase between roughly $10 and $90 per employee when the increase takes effect Jan. 1.

Unlike many other states, Maine has not had to borrow money from the federal government to stabilize its unemployment trust fund.

Premiums ranged from roughly $93 to $862 this year. The range will jump to between $94 and $954 in 2011.

Under state law, unemployment benefits are funded entirely by insurance premiums paid by the state’s businesses.

Companies pay premiums on the first $12,000 of employee wages. Different businesses pay different rates, based on their history of payments into the system and the number of claims filed by former employees, said Adam Fisher, spokesperson for the Department of Labor.

Fisher said the 2011 increase is needed because the state is paying out more than it is taking in.

In the first nine months of this year, for example, employers paid $123 million into the system, while workers collected $170 million in benefits. In 2009, $83 million was taken in and $256 million was paid out, said Fisher.

Maine’s rates have climbed in recent years, but Fisher said rates were nearly the lowest allowed by law from 2000 to 2007.

“In the last two years, they went up as a result of a higher numbers of folks collecting unemployment and taking longer to find new work,” he said.

In September, Maine’s unemployment rate was 7.7 percent, down from 8 percent in August and 8.1 percent in September 2009. The total number of unemployed Mainers was 53,100 in September. The national unemployment rate for October was 9.6 percent.

 

Staff Writer Jonathan Hemmerdinger can be contacted at 791-6316 or at: jhemmerdinger@mainetoday.com

 

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