Although there are federal requirements all states have to follow with their UI Trust Funds, states do have some flexibility in how they structure their taxes. Our UI Trust Fund is healthy because of the system used to fund it. In 1975, the Oregon State Legislature worked with business and labor groups to pass major reforms that put in place a self-balancing tax system. This model is the base of the system used today.
During strong economic times, the tax schedule increases so we can replenish the UI Trust Fund. Once we have strong reserves, the tax schedule begins dropping. Also, each employer’s tax rate will adjust based on the rate their employees received UI benefits.