North Shore Chamber urging Unemployment Insurance relief
The North Shore Chamber of Commerce is encouraging its members grappling with significant increases in their first-quarter unemployment insurance bills to contact their legislators to urge relief.
Despite the state’s recent decision to freeze the Unemployment Insurance (UI) contribution rate for employers for two years to avoid a 60% increase in costs, employers are now being required to shoulder an unprecedented $5 billion deficit in the state’s UI Trust Fund in the aftermath of the COVID-19 economic shutdown.
Karen Andreas, president and CEO of the North Shore Chamber, has signed onto a letter to state and federal lawmakers urging them to identify other resources, including pandemic recovery funds due from the federal government, to close the deficit. (Read the full letter here.)
“By relying on businesses to foot the bill for government decisions before and during the pandemic, the state’s current approach to address the UI Trust Fund’s deficit disproportionately harms Massachusetts’ employers and employees,” says the letter from Andreas and other business group leaders being circulated by the Retailers Association of Massachusetts.
“Employers appreciate their responsibility to invest in a soundly managed UI system and the importance of UI benefits during crisis periods. But forcing them alone to bear responsibility for the $5 billion deficit – through higher UI taxes and a new unemployment obligation assessment – impedes our economic recovery and will result in residents facing lower wage and job growth potential for years to come.”
The increase in UI costs is the result of a ballooning solvency fund assessment. That assessment, which normally pays certain socialized system costs like dependency allowances and claims from businesses that have closed, is now being used to cover COVID-related layoffs.
As a result, the assessment on employers, which was 0.58% in 2020, is now 9.23%, according to RAM.
UI contributions, which fund unemployment benefits, are based on wages paid. Employers subject to UI law are required to make quarterly contributions to fund the program in Massachusetts.
North Shore Chamber members are strongly encouraged to contact their congressional representatives and senators, state legislators and the governor asking that they support the use of federal recovery funds to ease the UI tax burden. (See here for talking points.)
“As these costs are primarily the result of state and federal government decisions to enhance and expand UI benefits and shut down private business operations during the pandemic, it is only fair that government take on a shared responsibility in this manner,” the Retailers Association of Massachusetts says. “Therefore, our federal and state leaders should not expect employers to cover the entire $5 billion UI Trust Fund deficit for layoffs triggered by government decisions, not those of business owners.”
For questions or assistance with your Unemployment Insurance assessment, contact the staff at the North Shore Chamber office at 978-774-8565.
- Sonya Vartabedian, Director of Communications, North Shore Chamber of Commerce
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