Article Source: State House News Service
Author: Chris Lisinski
Employers in Massachusetts will face additional assessments equal to 10.5 percent of their unemployment insurance rates as part of an accounting fix the state deployed to soften the pandemic’s impacts, the Baker administration announced last week.
The unemployment system stabilization law Gov. Charlie Baker signed in May unwound massive spikes in the bills that businesses pay to fund joblessness benefits while imposing a new COVID-related charge, but until recently, employers did not know how much the additional assessments would cost.
In a letter to businesses dated Thursday, the Department of Unemployment Assistance announced the quarterly “COVID-19 Recovery Assessment” will be equal to 10.5 percent of each employer’s existing UI rate. The Boston Business Journal first reported about the letter on Friday.
Those who pay a UI rate of 4.98 percent, for example, will face an additional COVID-19 assessment at a 0.523 percent rate. Adjusted UI rates and COVID rates will be available starting July 26, the department said, with bills for the first and second quarters due by Aug. 31.
COVID-19 Recovery Assessments will be retroactive to Jan. 1 of this year and will help “manageably spread over time the cost of benefits paid by the UI Trust Fund in 2020 and 2021,” DUA wrote in its letter.
While the law aimed to reduce the immediate impact and trimmed the solvency assessment rate from 9.23 percent to about 1.1 percent, employers remain on the hook in the long term to cover the upheaval in the state’s unemployment insurance trust fund. As of May 31, the fund had a balance nearly $1.8 billion in the red, according to the most recent state report.
Business groups (including North Central Massachusetts Chamber of Commerce) have been pushing for the Legislature and administration to use a portion of state government’s roughly $5 billion American Rescue Plan Act funding to pay down the deficit and reduce the burden they face. Lawmakers will kick off a public hearing process Tuesday about how to use that money.