Instructions For Quarterly Premium And Wage Report Form

STATE OF TENNESSEE

DEPARTMENT OF LABOR AND WORKFORCE DEVELOPMENT

PHIL BREDESEN

220 French Landing Drive

JAMES G. NEELEY

GOVERNOR

Nashville, TN 37243

COMMISSIONER

(615) 741-2486

June 26, 2009

Dear Ell1ployer:

The Tennessee General i\ssen1bly recently passed into law HB 2324/SB 2315. The legislation is intended

to prevent our state's Unen1ployn1ent Insurance Conlpensation TnIst Fund froll1 becoll1ing insolvent as well

as to avoid the necessity of our state having to borrow funds froll1 the federal goven1111ent in order to

continue paying benefits to our unell1ployed citizens.

i\.t

the sanle till1e, in order to accoll1plish that goal, the

legislation requires additional contributions fronl Tennessee ell1ployers.

The Fund has 1110ved dangerously close to becoll1ing insolvent, an event that could have OCCUlTed as soon as

this year or by early 2010 at the latest. This situation was brought about by today's record nUll1ber of

clain1s for unenlployn1ent insurance benefits coupled with an unel11ployl11ent taxing systell1 that, prior to the

passage of this legislation, had not been updated to n1eet the denlands of our 1110dern econonlY in over 25

years.

The legislation increases Tennessee's taxable wage base fronl its current $7,000 linlit to $9,000. This

change is effective January 1,2009, 111eaning all wages paid in the current year (including those previously

reported for the first qual1er) are subject to the $9,000 taxable wage base. Our agency will be relying on

you, the enlployer, to infonn liS of the taxable portion of your enlployees' wages. We ask that you report

any additional taxable wages (those over $7,000) from your previously filed first quarter 2009 pren1iun1

report as additional year-to-date taxable wages on line

of your second quarter prenlium report, then

Sill1ply continue with the $9,000 taxable wage calculation on each enlployee's earnings for the remainder of

the year. If, however, your payroll accounting systenl prevents you froll1 reporting the additional first

quarter taxable wages on your second quarter report, you may file an all1ended prell1ium report for the first

quarter. Please bear in ll1ind that while our state's systenl ofunelnploynlent insurance reporting is by and

large based on the voluntary conlpliance of our employers, an audit systell1 exists whereby errors in the

reporting process are discovered and corrected.

In addition, the legislation provides for a temporary additional fee of .6% on all unemployment insurance

prenllunl rates on Prell1iunl Tables 1,2, and 3. This provision is likewise effective January 1,2009. You

will soon receive an Employer Statell1ent fron1 our agency for the anlount ofpremiun1 due on the basis of

the additional .6% rate applied to the taxable wages you reported for the first quarter 2009.

While our agency genuinely regrets any inconvenience or hardship the provisions of the legislation may

place on your business or household, this action will help avoid the need to borrow flInds fronl the federal

government and save millions of dollars of interest expense that en1ployers would have to pay. It is now our

agency's task to administer and enforce the provisions of the legislation, and I pledge to you that we will do

so in as efficient and equitable a Inanner as possible.

Those legislators that supported this bill should be commended for looking at the bigger picture of the long

term cost to the en1ployer COll1111unity if the Federal Govenlnlent were to take control of the program.

Sincerely,

r~-M~

James G. Neeley

Instructions For Quarterly Premium And Wage Report Form - 2009 Page 2

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