Ohio’s Workforce Development System —
A Systematic Look at Ohio’s Employment and Unemployment Compensation
Systems
Over the
past few years, many Ohio businesses have consistently struggled with
recruiting qualified individuals for open positions within their company.
Congress decided in 1998, with the passage of the Workforce Investment
Act, that a more coordinated effort between should be available to businesses
and jobseekers.
Why should employers get involved with local and/or state workforce development
initiatives?
You’re already paying for it!
How many investments
have you made where you do not expect some performance or accountability
in return? If you are not helping to establish your local workforce
development system, then you are ignoring one of those investments.
Your state business association(s), local chambers of commerce and
employment one-stop service offices need to hear your comments on how
to make the process more effective. Also, if you are spending time
and resources to train or retrain your employees, you could be paying
twice for the same service.
What
exactly am I paying for?
Like most states,
Ohio employers pay for the administration and benefits of the unemployment
insurance (UI) system at both the federal and state level. The Federal
Unemployment Tax Act (FUTA) provides funding for Unemployment Compensation
(UC) administration and employment service programs and UC benefits
are paid for through Ohio’s Unemployment Compensation Law. An
easier way to think about each area is that FUTA taxes are collected
directly by the Internal Revenue Service (IRS) and those tax revenues
pay for the administration of state unemployment insurance and related
employment service programs. On the other hand, a separate Ohio law
levies a state tax that pays benefits and administers the tax, wage
record and benefit provisions for UC recipients. Among other items,
the Tax Division within the Ohio Department of Job and Family Services
(ODJFS), serves approximately 230,000 active Ohio employers and processes
$1 billion in tax revenue per year.
What does
this mean for my company?
Combining the
two areas, each Ohio employer pays approximately $183 annually per
full-time employee for unemployment insurance. While each employer’s
experience and industry classification determines its tax liability,
all employers pay at least $56 per full-time employee for FUTA. Why
is this important? Well, currently U.S. employers send about $6.5 billion
in FUTA tax to the federal government but the states, on average, only
receive about half of that back each year. In Ohio, employers pay almost
$300 million in FUTA taxes but receive only about 35% in return to
fund UI administration and other programs such as employment services,
one-stop career centers, veteran’s employment and training,
and labor market information.
There is an ongoing effort to ensure Ohio receives much more than 35
cents on the dollar, so the state can provide additional funding for
employers and jobseekers.
At the Ohio Chamber,
our primary focus is on the dollars currently being used at the state
level to fund the employment services system (i.e. the one-stop system,
etc.). Whether you’ve used the system in the past or not, ask yourself
the following questions:
1. Are any of
the local one-stop centers a valuable resource for your company?
- If not, have you submitted recommendations to that center on how
they can improve their service to the business community?
2. Why don’t you use a one-stop
center for employment or training needs?
3. Have you used Ohioworks.com?
- If yes, what do you like about it?
- If no, why not? What are some suggestions that enable a government
internet resource to be more business friendly?
Ohio’s employment
services system is the vehicle that provides currently unemployed individuals
additional training and educational opportunities through the Workforce
Investment Act of 1998 (WIA) and other federal, state and local funding.
Local boards around the state control how this money is used to develop
local workforce training initiatives that respond to local needs. Each
board is comprised of at least 51% business representatives in partnership
with local community officials, labor leaders, educators and others.
I don’t have a lot of time, but how can my company get involved?
If you are specifically
interested in the development of local workforce training initiatives
in your area contact your local chamber of commerce or the
local workforce investment board chairperson. Each workforce investment
board chairperson will be someone from the private sector business
community, not the public sector.
If you would like
to help win systemic, statewide change, ranging from returning more
of the funds employers pay into the employment services system or working
with state lawmakers to obtain additional funding for incumbent worker
training, contact Tony Fiore, director of labor and human resource policy
at 614-228-4201 or by e-mail mailto:afiore@ohiochamber.com.
• We recommend
these resources if you'd like to learn more about workforce development.
•The
Governor's Workforce Policy Board will play a major guiding role
in many upcoming changes.
For more information
on this issue contact Ohio Chamber Director of Labor and Human Resources
policy, Tony Fiore, at (614) 228-4201, toll free at (800) 622-1893 or
afiore@ohiochamber.com.
|
