Massachusetts employers have had to pay some of the highest unemployment taxes in the nation for several years and the difference can be significant. For example, Massachusetts’ employers pay $200 to $300 more per employee per year than their peers in Connecticut and New York. Reform of the unemployment insurance system has therefore been at the top of the NFIB legislative agenda for at least fifteen years. Recently, the Massachusetts Senate took up so-called UI Reform legislation.
Overall, NFIB believes the Senate version of UI reform was a missed opportunity because it did not address the underlying cost drivers in the system – easy qualification for benefits and generous level of benefits that place Massachusetts out of the mainstream compared to other states. Provisions that permit qualification for benefits after 15 weeks of work when most states require 20 weeks and that provide 30 weeks of benefits when all other states offer 26 weeks or less will continue to make Massachusetts a high cost outlier in unemployment insurance premiums.
The bill contained some benefits to employers, such as freezing the rate in 2014, avoiding a 30% increase and saving employers half a billion dollars, and providing certainty by setting the rates for 2015-2017. The bill also increased the definition of seasonal employment from 16 to 20 weeks.
But with a 50% increase in the taxable wage base from $14,000 to $21,000 and the creation of new cause of action against employers under the guise of whistleblower protections, the bill simply failed to offer the kinds of cost savings and long-term reforms that would improve the business climate and lower the costs of job creation in the Commonwealth.
I had an opportunity recently to address the Boston chapter of SCORE, an organization of retired and experienced business executives whose mission is to build successful small businesses across the nation, one business at a time. SCORE is a nonprofit association dedicated for fifty years to helping small businesses get off the ground, grow and achieve their goals through education and mentorship. Supported by the U.S. Small Business Administration (SBA), and a network of 11,000+ volunteers, SCORE delivers its services at no charge or at very low cost. SCORE provides volunteer mentors to share their expertise across 62 industries, free, confidential business counseling in person or via email, free business tools, templates and tips in person and online, and inexpensive or free business workshops (locally) and webinars (online 24/7). I highly recommend the services of the SCORE chapter located near your small business to any small business owners who could benefit from another set of experienced eyes and ears.
Legislators Present Small Business Agenda
A group of Republican legislators presented their small business agenda designed to provide small business owners with “predictability” and assure the state’s job creators that the rules are not going to change in the middle of the game” according to Rep. Shauna O’Connell (R-Taunton).
Proposals on the agenda include a delay between the enactment of a new tax by the legislature and the effective date for the new tax and a requirement that both the House and Senate Ways and Means committees hold at least six public hearings around the state on any proposals to for new or increased taxes. (There were no public hearings dedicated specifically to the so-called tech tax that was enacted in July 2013 and then repealed a few months later.) Other proposals would limit the application of treble damages against small businesses in lawsuits, make changes in the state’s unique independent contractor law to encourage more entrepreneurial activity, and mandate cost-benefit analyses prior to implementation of new state regulations and energy projects. Some of these ideas could find their way into an economic development bill to be debated in the House later this year.