In December 2016, Massachusetts’ unemployment rate dropped to 2.8 percent, the lowest since 2000. And while it’s ticked up since then—as of February, it’s 3.4 percent—Massachusetts’ unemployment benefit rate and duration are still the highest in the nation at $722 per week and 30 weeks maximum.
At this rate, a recession will wipe out the state’s unemployment insurance fund, Labor and Workforce Development Secretary Ron Walker said, despite official state forecasts that show the fund staying above $600 million for the next five years.
Meanwhile, two unemployment insurance rate hikes are scheduled for employers in the coming years. The first is slated for Jan. 1, 2018, when the rates paid by businesses will be shifted from Schedule C to Schedule E. This means that the average cost will increase to $617 per employee in 2018, up from $508 per employee in 2017.
Gov. Baker’s latest MassHealth funding proposal could also impact unemployment insurance rates for employers. Under the plan, the Employer Medical Assistance Contribution would be temporarily doubled, and as an exchange, unemployment insurance rates would be frozen for two years. This would affect companies with six or more employees.
The time for real unemployment insurance reform in Massachusetts is now.
