Louisiana unemployment taxes for businesses are going down after a cut in unemployment benefits earlier this year. (Julie O’Donoghue/Louisiana Illuminator)
Louisiana businesses will pay less in unemployment taxes following an across-the-board reduction to jobless benefits that took effect at the beginning of this year.
The employer tax will drop from approximately $98 to $89 per employee making at least $7,700 per year starting Jan. 1. For most businesses, the change should work out to approximately 9% in tax savings.
At the same time, maximum benefits for the unemployed will increase 2.5% from $275 to $282.
The changes are the result of the expectation that Louisiana’s unemployment insurance trust fund will reach $1.2 billion in August 2026. A projected balance of $1.15 billion automatically triggers the reduction in employer taxes and a boost in benefits under state law.
The modest bump in weekly unemployment payments won’t make up for a much larger cut in those benefits that went into effect at the beginning of this year, however.
Unemployed people eligible for maximum benefits will receive $84 to $140 more per year as a result of the discussed change, but those same workers are expected to lose over $3,600 in benefits this year.
Through a new law passed last year, Gov. Jeff Landry and Louisiana lawmakers reduced the cap on receiving unemployment benefits from 26 weeks to 12 or 20 weeks, depending on the state unemployment rate.
As a result, people who were previously entitled to $7,150 in unemployment support annually will only be able to receive $3,384 to $5,640 per year moving forward. The length of time a person can receive unemployment benefits is now tied to the state unemployment rate.
When the average unemployment rate is under 5%, as it is now, a person can only receive unemployment benefits for a maximum of 12 weeks. As the unemployment rate rises, the length of time a person can receive benefits lengthens until it reaches a maximum of 20 weeks when the rate is 8.5% or higher.
Another set of new requirements will also come into play Dec. 31 under another new law.
People seeking unemployment benefits will have to prove they have done five searches for work for every week they expect to access a payment. Currently, they are required to show three work searches under state rules.
The Louisiana Workforce Commission will also be able to disqualify people from receiving unemployment benefits if they don’t show up for a scheduled job interview.
Those who support the new restrictions say they will encourage people to seek work more aggressively after losing their jobs. Critics counter that Louisiana’s unemployment benefits are so meager that people aren’t intentionally staying on unemployment in lieu of paid work.
“It’s $275 per week. I don’t think anyone is getting rich on unemployment,” Louis Reine, president of the Louisiana AFL-CIO, said during a legislative hearing in 2024.
