by Brooke Thomson
The Massachusetts House of Representatives today adopted a measure to provide relief to employers affected by the increase in COVID-related Unemployment Insurance solvency assessments.
The plan, if adopted by the Senate and signed by the governor, will lower the solvency assessment from 9.23 percent to 1.12 percent and spread the $7.4 billion bill for COVID unemployment benefits over 20 years through borrowing.
Under the proposal, payment for first-quarter unemployment insurance bills will be delayed until July 31, when payment for second quarter will also be due and the solvency cost reduced. Employers who already paid their 2021 first-quarter bills will receive a tax credit against future UI assessments.
The state will remove approximately $7.4 billion in COVID-19 claims from the solvency account and place that money in a newly created COIVD-19 account. The COVID account will be paid off through a combination of 20-year bonds and a special COVID-19 assessment on employers that will be spread out over several years.
AIM has been working with state and federal policymakers to find a solution to minimize the impact of the solvency assessment on employers since first-quarter bills went out in early April. Employers were not expecting the large increase in the solvency assessment rate, and many were overwhelmed when bills arrived.
Since that time, AIM has worked tirelessly to lower the solvency assessment and delay quarterly payments.
“It is gratifying to see a plan that will significantly reduce UI bills for employers,” said John Regan, President and CEO of Associated Industries of Massachusetts.
The House also used the bill passed today to reject Governor Charlie Baker’s amendment from last month to the COVID-19 emergency sick-leave legislation.
Under the new COVID-19 emergency sick leave program, employers who are not covered by the Families First Coronavirus Response Act (those with more than 500 employees) must provide up to 40 hours of paid COVID-19 sick leave for full-time employees who become sick with COVID-19 or seek to obtain a vaccine.
In exchange for providing the leave, employers will be reimbursed by the Department of Administration and Finance. AIM is supportive of the sick-leave reimbursement proposal, as it mirrors the language passed by the Legislature originally and will fully compensate members for paid sick leave. The program is capped at 40 hours and has a maximum benefit of $850.
Going forward, starting August 1, the state will begin charging all COVID-19 related layoffs directly to the employer again, meaning the effects of any future layoffs will be seen in the following year’s assessment charges. The proposal passed today now moves the Senate for consideration, likely later this week.
This unemployment insurance legislation does not use federal stimulus funding to reduce the burden on employers. AIM will continue to advocate for Massachusetts to follow other states and use federal money to offset long-term deficits in the unemployment insurance trust fund.
If you have questions about the UI Solvency Assessment, this legislation or the COVID leave language, please contact Brooke Thomson email@example.com. If you would like to learn more about state COVID-related requirements, please contact the AIM Employer Hotline