The legislature voted
to freeze unemployment insurance rates for the fourth consecutive year in 2014.
The House and Senate have also passed differing versions of legislation to
“reform” unemployment insurance. The differences must be resolved before the
changes can become law. The effort to bring UI premiums in line with other
states through changes in benefit and eligibility standards met with mixed
success in these bills. The legislation establishes rates for 2015-17 giving
employers a level of predictability, but the underlying reforms in benefits and
eligibility were underwhelming. The definition of seasonal employees was
expanded to 20 weeks but Massachusetts will still offer 30 weeks of benefits
–longer than any other state and four weeks longer than most states. And
workers will be eligible for benefits after 15 weeks of work (called
‘attachment to the workforce’). And the wage base to which the UI tax rate is
applied will increase from the current $14,000 to $15,000 in the House version
and $21,000 (50% increase!) in the Senate version. Businesses that use the
system frequently will pay higher premiums but MA employers at both ends of the
spectrum — frequent users and those who have never laid anyone off — already
still pay some of the highest taxes in the nation.
NOTE: Some employers
may experience UI premium increases due to experience rating (layoffs) and
other factors even when rates are “frozen’.
Without the legislative action in 2014, premiums
would have increased by approximately $250 per employee in 2014, or by a total
of $500 million or a 30% increase for all employers in Massachusetts.