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Unemployment Solvency Fix passed by the MA House of Representatives

Published:  May 19, 2021

On May 18, 2021, the Massachusetts House of Representatives passed legislation to address the overwhelming Unemployment Insurance bills employers received in April. The plan would reduce the solvency assessment rate from 9.23% to 1.12% by shifting COVID related claims into a new account to be paid down over a period of 20 years. Payment of the first-quarter UI bill would be pushed back to July 31st when the second-quarter bills will also be due. Employers who already paid their first-quarter bill would be given a tax credit for the difference.

The House’s plan does not use any of the federal relief money to offset the long-term deficits in State’s unemployment trust. So, while this plan is an important first step in relieving the short-term burden on employers, industry groups continue to urge the State to use federal relief funds to refill the unemployment trust, which was depleted by the COVID crisis.

The plan would also require employers to provide sick leave to employees who are sick with COVID or are getting vaccinated. The sick leave would be capped at 40 hours with a maximum benefit of $850. Employers would then be reimbursed through state funds.

After August 1st, the system will go back to charging new COVID related unemployment claims directly to employers.

The Senate will likely take up the bill later this week.  

If you have any questions about this topic or any other labor and employment law matters, please feel free to contact the attorneys at The Royal Law Firm at 413-586-2288