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The Healey administration and the Biden administration reached an agreement regarding the state’s $2.5 billion unemployment insurance error dating back to 2020 through 2022. In 2023, an external audit found that the Baker administration over withdrew $2.5 billion from federal unemployment insurance benefits, when it should have been drawn from the state fund. For over 18 months, state and federal officials worked behind closed doors, with very little transparency, to broker a deal.

NFIB was notified by Secretary of Labor and Workforce Development Lauren Jones that Massachusetts must repay $2.1 billion to the federal government, along with $70 million in interest and penalties. According to Jones, the original tabulation of the debt surpassed $3 billion, but the state was able to reduce the total liability to $2.1 billion to be paid over the next ten years with the first payment due in December of 2025. The state is only covering the $70 million interest and penalties while saddling employers with a whopping $2.1 billion tab, to be deducted from the UI Trust Fund.

This series of missteps and blunders is unacceptable. The state made the mistake, they should pay for it. Even national news outlets are in utter disbelief over the state’s UI mismanagement and asked NFIB’s Massachusetts state director Christpher Carlozzi to comment on the incident. NFIB asked small business owners to immediately contact their elected officials noting employers already experience two UI rate increases in 2024 and 2025, that the fund is projected to be in solvent and at schedule G by 2028, and that business owners are still paying back the $2.7 billion in covid assessments.

Lawmakers must begin to reform this extremely broken UI system. That means addressing our overly generous benefits ($1051 per week) and lax eligibility requirements, not just default to raising taxes. Massachusetts has been a UI outlier for too long, often ranked worst in the nation for UI but currently placing 47^th according to the Tax Foundation.

We ask that you be ready to act on this very important issue. Over the next few weeks we will need every employer’s help to push for meaningful UI reforms that will benefit business owners. Please keep a close eye on your inboxes for future updates, but until then, please contact your lawmakers on this issue: UI Issue Alert