Rep. Lombardo supports bill to provide additional unemployment insurance rate relief to Massachusetts businesses

BOSTON State Representative Marc Lombardo (R-Billerica) recently supported legislation that will provide additional financial relief to Massachusetts businesses facing huge pandemic-related increases in their unemployment insurance bills. 

Due to the record-breaking number of unemployment claims filed during the COVID-19 state of emergencywhich prompted a statutorily-mandated increase in the formula used to calculate an employer’s experience rating, the annual unemployment insurance solvency fund assessment jumped from 0.58% to 9.23% for 2021, representing a staggering 1591% increase in just one year.  

Representative Lombardo said compromise language drafted by the Baker-Polito Administration will mitigate the UI rate increase by spreading the costs over a 20-year period, effectively reducing the assessment for businesses from 9.23% to 1.12%. The compromise was unanimously approved by the House of Representatives on a 157-0 vote on May 18, but still requires Senate approval. 

Under the compromise plan, a new COVID claims account will be set up to handle existing COVID claims that had been placed in the solvency account. The Department of Unemployment Assistance will recalculate first-quarter UI bills to reflect these changes, with payment on these bills due by July 31. Beginning August 1, new UI claims will be charged directly to employers’ accounts. 

The House and Senate had previously moved the due date for first-quarter bills from April 30 to June 1. Representative Lombardo noted that employers who have already paid their first-quarter bills will receive a credit. 

Representative Lombardo was one of 53 legislators who wrote to Governor Charlie Baker and House and Senate leadership on April 14 urging immediate steps be taken to protect employers from the solvency assessment increase, and calling for the use of federal funding to replenish the Unemployment Insurance Trust Fund. The compromise language approved by the House does not require the use of federal funding, although Representative Lombardo noted that this issue could be revisited at a later date.  

Before voting on the compromise UI plan, the House also rejected a proposed amendment filed by Governor Baker that would have excluded municipal employees from qualifying for the COVID-related paid sick leave program approved by the House and Senate in March. That bill also provided assistance to small businesses by freezing the UI rate at Schedule E for calendar years 2021 and 2022 and exempting forgiven federal Payroll Protection Program (PPP) loans from being subject to the state income tax. 

The UI solvency fund assessment compromise language now moves to the Senate for its consideration.