Employers Could Lose $2 Billion in Tax Credits / If State Doesn't Conform

Article excerpt

Oklahoma employers could lose approximately $2 billion in federal unemployment tax credits if the Oklahoma Employment Security Commission does not conform to federal statutes on the usage of unemployment benefits, according to Bob Funston, executive director of the Oklahoma Employment Security Commission.

Funston revealed the potential problem at the commission's monthly meeting Tuesday.

Presently, the federal government charges a 6.2 percent unemployment tax to Oklahoma employers for their employees. However, Funston explained that the tax actually is reduced 5.4 percent because Oklahoma law has conformed to federal law, so the tax really is 0.8 percent.

But a recent court case in Oklahoma may have thrown the state out of conformity with federal law.

About a month ago, a court awarded unemployment benefits to the commission to grant to the ex-wife of a worker to be used as child support.

Funston said the U.S. Department of Labor holds that benefits paid from a state's unemployment trust fund must be for unemployment, not for child support or any other purpose.

The employment security commission could challenge the Department of Labor on the case, but if the commission lost it would mean a costly headache for state employers.

"I have calculated that it could cost employers $2 billion in one year if we don't conform with the Department of Labor," said Funston. …


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