Friday, January 20, 2012

Unemployment Insurance Costs: House and Senate Pass 2012 Rate Freeze

The Chamber continues to work for the passage of unemployment insurance (UI) rate relief legislation in the first quarter of this year.  The Chamber has urged State House leaders in recent months to advance legislation freezing UI tax rates at Schedule E in 2012.  Within the past week, the House and Senate each passed versions of a FY’12 supplemental spending bill with language implementing such a freeze. This is an important step toward securing legislation that will help to support Massachusetts’ economic recovery, mitigate an obstacle to new hiring, and improve the overall business climate.  We and other business groups are also working with the Patrick Administration on this issue. 

Absent such legislation, Massachusetts businesses would face a 25% increase in 2012 UI taxes (average cost of $141 per employee), resulting from a UI rate increase from Schedule E to G that would be triggered under current law.  Massachusetts UI costs have long been among the very highest in the nation. By freezing UI rates at schedule E, Massachusetts can ensure that employers will be spared more than $500M in unemployment insurance taxes.  Current economic forecasts, and Unemployment Insurance Trust Fund projections, suggest that Massachusetts can afford to take such action without jeopardizing fund solvency or beneficiary payments. 

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