In 2014, the state’s small business owners dodged a $500 million tax increase.
Small business owners breathed a collective sigh of relief last spring, after narrowly dodging a huge unemployment insurance tax.
This year, though, you’ll find out whether last year’s overhaul of the system actually lowered costs for business owners.
Coming in 2014, Gov. Deval Patrick used his State of the State Address to urge lawmakers to reform the system. By that point, the system demanded some of the highest-in-the-nation UI taxes from businesses.
For years, NFIB has worked for fundamental changes that brought Massachusetts UI rates back into the mainstream paid by employees in most other states.
The legislature voted to freeze
unemployment insurance rates for the fourth consecutive year in 2014. Without 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 percent increase for all employers in Massachusetts.
The Legislature and the governor approved reforms to the system, which froze rates for the next three years. In addition, reforms increased the wage base by $1,000 per employee, from $14,000 to $15,000.
“Businesses that use the system frequently will pay higher premiums,” says Bill Vernon, Massachusetts state director. “But Massachusetts 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.”
How will reforms to the state’s unemployment insurance system affect your small business?