Before this summer, if someone had asked me about Massachusetts’ Unemployment Insurance Trust Fund, I probably wouldn’t have had much of an answer.
But here at the North Shore Chamber of Commerce, it’s become one of the issues we’ve been following closely. UI, as it’s called, kept appearing in legislative updates, policy discussions, and conversations with business leaders, so I decided to learn more. What I found wasn’t just a conversation about unemployment taxes but a much broader discussion about Massachusetts’ cost of business, workforce, and long-term competitiveness.
The UI Trust Fund is the state’s account that pays temporary benefits to workers who lose their jobs “through no fault of their own.” Employers fund the system through unemployment insurance taxes – based on their payroll – and those contributions are meant to provide short-term financial assistance while eligible workers search for new employment. Like any insurance program, the system works best when money coming in keeps pace with the money going out.
That’s where the conversation begins.
The UI Fund is close to running out of money. The Department of Unemployment Assistance projects the Trust Fund, which ended 2025 with approximately $1.47 billion, could reach a negative balance beginning in 2027.
So why is this happening? Because the state pays out more than it takes in.
According to the Massachusetts Taxpayers Foundation (MTF), employers contributed roughly $1.5 billion to the system in 2025 while benefit payments totaled about $2.4 billion. Looking back over the last decade, employer contributions have increased by about 10 percent, but benefit payments have increased by approximately 61 percent.
As I kept reading, it became clear there wasn’t one single explanation, but a variety of factors:
Massachusetts pays the highest weekly benefit in the country (up to $1,105 per week).
More claimants today come from higher-paying jobs than they did a decade ago, which means larger benefit payments because benefits are tied to previous earnings.
Claims are lasting longer than they once did, and eligible claimants can receive assistance for up to 30 weeks in certain circumstances (the highest period in the country).
At the same time, Massachusetts businesses continue to repay more than $2 billion related to pandemic-era unemployment funding from the Federal government.
Together, those trends help explain why the Trust Fund has become an increasing focus for businesses.
For employers, this is where the conversation becomes especially relevant.
The financial condition of the Trust Fund affects employer contribution rates, and MTF projects businesses could move to Schedule G, the highest unemployment insurance assessment schedule, by 2028. In practical terms that would mean:
Employer taxes increase by 25% to 30% across every rate category.
Annual UI costs increase by roughly $40 per employee to more than $600 per employee.
Statewide employer taxes increase to approximately $2.5 billion – more than $1 billion higher than in 2025.
Even with those higher contribution levels, MTF’s analysis projects the Trust Fund would still face long-term financial challenges under its current projections.
What I found interesting wasn’t a single statistic but rather how the issue grew beyond a UI trust fund. The conversation, in my opinion, needs to focus on broader workforce policy, employer costs, and the long-term sustainability of a system that affects businesses and workers across the state.
There are a variety of ideas being discussed on Beacon Hill, ranging from changes to employer taxes (some want businesses to pay more while others advocate for less) and changes to benefit structure (change weekly benefit payments and duration). Each takes a different approach to the same challenge, and each has its own tradeoffs.
The numbers tell one story, but the decisions that follow will tell another.
Beacon Hill won’t simply be debating the future of the Unemployment Insurance Trust Fund. Lawmakers will also be debating how Massachusetts positions itself in an increasingly competitive inter-state economy, one where employers, workers, and investment all have more choices than ever before.
The decisions made by the Legislature won’t just influence the future of the Trust Fund. They’ll help shape the environment in which Massachusetts businesses hire, invest, compete and grow for years to come.
Anthony Morales
Government Affairs Intern
anthony.morales@northshorechamber.org
Anthony Morales is a rising junior at Providence College, double-majoring in Business Economics and History. At Providence, he is involved in the Economics Club, belongs to the Leadership Fellows Program, and was selected to serve as a first-year class Orientation Leader. As an intern at the North Shore Chamber of Commerce, Anthony’s work focuses on advancing policy and legislation that fosters a business-friendly environment for the region’s businesses and entrepreneurs.
