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MISSOURI
DEPARTMENT OF LABOR AND INDUSTRIAL RELATIONS
MISSOURI DEPARTMENT OF LABOR GIVES EMPLOYERS TIME TO PLAN FOR INTEREST
ASSESSMENT ON FEDERAL LOAN
Jefferson City, MO – The Missouri Department of Labor and Industrial
Relations sent interest assessment informational letters to nearly 130,000
employers last week. These letters were sent at no additional cost
to Missouri employers. The letter informed employers that in June
they would receive an assessment to repay the interest due on the projected
$296 million loan the state will be required to borrow from the federal
government to pay unemployment benefits during federal fiscal year 2004.
The estimated accrued interest charge that will be assessed in June to
all Missouri contributory employers is in excess of $14 million.
Federal law prohibits interest due on federal loans to be paid from regular
employer contributions to the unemployment insurance trust fund, therefore
a special assessment is required.
Despite the fact the Department has worked with legislators, business
groups and labor organizations for over five years to develop viable solutions
to the solvency of the unemployment insurance trust fund, the vast majority
of Missouri employers were not aware of the insolvency problems.
“The early notification was for informational purposes only so employers
may budget and plan for the additional expense. The Department felt
an obligation to inform and advise Missouri employers of the additional
cost they will encounter in June,” said Catherine B. Leapheart, director
of the Missouri Department of Labor and Industrial Relations.
In 2003, employers were assessed $410,000 to pay interest on the $42
million borrowed from the federal government. Ninety percent of the
employers were charged less than $5.00. “Although exact assessments
for each individual employer has not yet been determined, given the large
increase in the funds borrowed, unfortunately, employers should expect
a much larger bill,” said Leapheart.
The unemployment insurance trust fund became insolvent during both the
1983 and 1992 recessions and the state was required to borrow from the
federal government to pay unemployment benefits. In 1983, employers
were mailed individual letters explaining the federal assessment charges
and similar notification was sent in 1992.
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FOR MORE INFORMATION CONTACT: Tammy Cavender (573) 751-7500
FOR IMMEDIATE RELEASE: April 5, 2004
Information and Planning · 3315 W. Truman Blvd.
· P.O. Box 1958 · Jefferson City, MO 65102-1958
573-751-7500 · 573-751-6552 (Fax)
Relay Missouri: 1-800-735-2966 (TDD) 1-800-735-2466 (Voice)