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Employment Department to Adjust Employer Tax Rates in '09
CONTACT:  Tom Fuller
Oregon Employment Department
(503) 947-1301

Each year, by law, the Oregon Employment Department reviews the tax rates it charges employers to fund the state’s unemployment insurance system and determines the tax rate for the coming year. Oregon has eight tax schedules. Schedule 8 collects the most tax revenue, Schedule 1 the least.
As of January 2009, Oregon employers will pay under tax rate Schedule 3. The department charged employers under tax rate Schedule 2 in 2008. Under the new rate schedule, the department will tax employers an average of 1.97 percent of payroll. This is an increase from 1.73 percent charged in 2008.
The tax schedules are design to ensure there is enough money in the state trust fund to pay unemployment insurance benefits to workers, even in economic downturns.  Moving between tax schedules creates a self-balancing trust fund. In times of low unemployment, the fund builds up because fewer individuals need to claim benefits. Consequently, as the fund builds, the need for more revenue decreases, and the taxes go down. Then in times of high unemployment, when many claim benefits, the fund depletes faster leading, eventually, to higher taxes that replenish the fund.
Each schedule has a range of tax rates and an employer’s individual rating depends on his or her previous experience with the Unemployment Insurance system. Employers will receive a notice in the mail from the Department regarding their particular rating.