Tuesday, November 29, 2011

Chamber urges state leaders to freeze unemployment insurance rates in 2012

The Chamber is working with a coalition of business groups for the passage of unemployment insurance (UI) rate relief legislation in Q1 of 2012. The groups have been lobbying state government leaders for such a bill, and this week the Chamber sent letters to House, Senate, and Patrick Administration officials urging them to enact it. The Chamber favors legislation freezing UI tax rates at Schedule E in 2012. Such legislation will help to support Massachusetts’ economic recovery, mitigate an obstacle to new hiring, and improve the overall business climate.

Massachusetts UI costs have long been among the very highest in the nation. Legislation is needed to avert a 31% premium spike or $220 average per employee rate increase in 2012, resulting from a UI rate increase from Schedule E to G that would be triggered under current law. Such a move which would substantially further the state’s cost disadvantage. By freezing UI rates at schedule E, Massachusetts can limit the average 2012 UI tax increase per employee and ensure that employers pay $529M less in UI taxes than they would have otherwise.

In response to advocacy by the Chamber and other leading business groups, the Legislature and Governor froze 2011 rates, delivering nearly $400M in savings to Massachusetts employers this year. Current economic forecasts and Trust Fund projections suggest that Massachusetts can afford to take similar action in the coming months – continuing to freeze rates at Schedule E in 2012 – without jeopardizing fund solvency or beneficiary payments. Doing so would provide immediate cost relief to Massachusetts employers at a time when such funds could be put to better use for hiring, construction, R&D, sales, and other business activities that will help to rebuild the state's economy. The Chamber will continue working, in collaboration with other business groups, to secure UI rate relief legislation in Q1 of 2012.

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