Massachusetts UI Commission Ends in Deadlock

Date: May 18, 2022

Last year, Christopher Carlozzi, NFIB’s State Director in Massachusetts, was appointed to a state commission charged with developing a strategy to bring the unemployment insurance fund to solvency. Thanks to statewide shutdowns and restrictions from the pandemic, the fund was quickly depleted in 2020. That resulted in borrowing money from the federal government to pay UI claims. Now employers are responsible for repaying the borrowed $2.3 billion over the next decade, along with keeping the fund solvent through their UI taxes.

 

The commission had a shaky start, with the House and Senate Labor chairs asserting the only way to solvency was through increasing the taxable wage base from the current $15,000 level. Carlozzi and other business-minded commissioners reminded the group that solvency isn’t simply the money going into the UI fund, but also the money going out through paid benefits. Since reforming the state’s generous benefit structure was deemed “off the table”, business leaders pushed to modify Massachusetts’ lax UI eligibility requirements instead. More specifically, requiring two-quarters of earnings to establish an attachment to the workforce like most other states (Massachusetts currently only requires one quarter).

 

In the end, the commission failed to reach a consensus or make any recommendations to the legislature because there were too many proposed suggestions that would increase UI costs for employers at a time when they are already responsible for repaying billions of dollars in federal loans. The costs outweighed the benefits of the final reform package and NFIB, along with the other business groups, opposed the final package. In the end, no action was probably the best action if accepting the report meant higher costs for employers.

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