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Unemployment and Temporary Disability Insurance Taxable Wage Base Announced for 2017

CRANSTON, RI Today the Department of Labor and Training (DLT) announced the 2017 rates of the two biggest income support programs it runs for Rhode Island workers and employers.

The 2017 Unemployment Insurance (UI) taxable wage base will be $22,400 for most employers and $23,900 for those at the highest tax rate (9.79 percent). This is a $400 increase over 2016 for both groups of employers. By law, the UI taxable wage base represents 46.5 percent of the average annual wage in Rhode Island. It is adjusted for inflation each year by tying it to a percentage of the average annual wage. As wages rise, so does the taxable wage base.

UI provides temporary income support to workers who have lost their jobs through no fault of their own and who have sufficient wages in the base period to meet the monetary requirements. It is funded entirely from state and federal UI taxes paid by RI employers.

Also, the Temporary Disability Insurance (TDI) tax rate will remain at 1.2 percent for 2017 and the TDI taxable wage base will be $68,100, an increase of $1,800 over the 2016 taxable wage base of $66,300. Paid by employees, not employers, TDI protects workers against wage loss due to a non-work related illness or injury, and through Temporary Caregiver Insurance (TCI), provides up to four weeks 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 and can be considered to be TDI for TCI purposes. Workers pay for TDI through a payroll tax.

Through October, DLT handled 34,932 TDI applications of which 8,202 about one of every four were initial claims for TCI. To date in 2016, TDI payments have averaged $482 per week and TCI payments have averaged $532 per week.

DLT also announced today that the employee contribution rate to the TDI Fund will remain at 1.2 percent in 2017. The TDI contribution rate has remained unchanged since 2012. The contribution rate is calculated by dividing total adjusted fund disbursements for a 12-month period by taxable wages for a 12-month period.

How DLT Calculates the Rates

DLT's Income Support Division calculates the UI and TDI taxable wage bases using the average annual wages in covered employment for the previous calendar year. In calendar year 2015:

UI Taxable Wage Base

Total wages: $17,303,390,167
Average monthly covered employment: 359,347
Average annual wage: $48,152
46.5 percent of the average annual wage: $22,391 (which by law is rounded up to the next higher multiple of $200, in this case $22,400)

TDI Taxable Wage Base:

Is equal to the annual earnings needed by an individual to qualify for the TDI maximum weekly benefit rate ($817).

This is determined by multiplying the maximum rate ($817) by the maximum TDI benefit duration (30 weeks) and then dividing by the percent of wages replaced (0.36 percent).

Thus: $817 x 30/.36 = $68,083 (which by law is rounded up to next higher multiple of $100, or $68,100).

Related links

  • Department or agency: Department of Labor and Training
  • Online: http://www.dlt.ri.gov/
  • Release date: 12-22-2016

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