The recent recession with its high unemployment rate, emptied the unemployment insurance trust funds of many of the states, which put increased pressure on employers to meet obligations under the Federal Unemployment Tax Act and other measures enacted to ensure those without work receive the required benefits. 

States with depleted unemployment insurance trust funds will not find it easy to replenish the accounts in the near term, but there are options for employers to help lessen the burden. If states raise unemployment insurance rates and wage bases to quickly repay federal loans, employers trying to recover after the recession can be hurt, especially because they are inhibited from more hiring. If states take little or no action to raise unemployment insurance taxes or the wage base, those falling into FUTA credit reduction status also are punishing employers. Under either scenario, maintaining a positive environment for attracting and keep businesses in a particular state becomes very challenging. 

This issue of Workforce Strategies examines what is ahead for states: can they weather the ongoing storm over unemployment benefits or do they face a fiscal tsunami? The report also covers the options employers have to limit, as much as possible, the impact of higher unemployment insurance costs.