Senate Passes Bill to Improve Access and Efficacy of Unemployment Insurance
On April 2, 2020, the Massachusetts State Senate passed legislation that will provide additional Unemployment Insurance (UI) relief to low-income families, non-profit institutions and employers.
An Act Providing Additional Support to Those Affected by the Novel Coronavirus Through the Unemployment Insurance System builds on UI legislation passed by the Senate and signed into law waiving the one-week waiting period to receive benefits. It also follows the passage last week of the federal Coronavirus Aid, Relief and Economic Security Act (CARES Act), which significantly increases UI benefits and expands eligibility during the coronavirus pandemic.
"The Senate remains focused on taking quick action to help our workers, and this bipartisan bill is the latest in our series of efforts to do so," stated Senate President Karen E. Spilka (D-Ashland). "We are facing a unique situation, but we are taking steps to ensure that Massachusetts workers and employers can maximize the benefits available to them through both state and federal actions as this pandemic unfolds."
“The Senate with today's passage of this legislation is taking swift action to provide additional support and relief for families, workers and businesses deeply impacted by the economic disruption caused by the COVID-19 pandemic," said Senator Michael J. Rodrigues (D-Westport), Chair of the Senate Committee on Ways and Means. "Thanks to the leadership of Senate President Spilka, and the collaborative working group approach pursued by Senator Lesser and Senator Jehlen, we are redoubling efforts to address the urgent needs of our Commonwealth during this public health crisis.”
Building off the Senate’s ongoing efforts to address the COVID-19 public health crisis and its impacts on workers, the bill includes four components to enhance the state’s UI system:
· Uncapping the UI dependency allotment;
· Extending the grace period for non-profit contributions;
· Protecting employers from increased UI costs due to coronavirus; and
· Ensuring 30 weeks of unemployment compensation during unemployment spikes.
“Our Commonwealth faces an unprecedented economic emergency as small businesses close their doors and workers lose their paychecks, “said Senator Eric P. Lesser (D-Longmeadow), Senate Chair of the Joint Committee on Economic Development and Emerging Technologies. “These expansions to the unemployment insurance system will provide emergency relief to both workers who need support and business owners who need to keep the lights on.”
“It is so important that we continue to support the people who have had their incomes interrupted by the efforts necessary to contain the spread of COVID-19,” said Senator Patricia D. Jehlen (D-Somerville), Senate Chair of the Joint Committee on Labor and Workforce. “I am glad we are able to take this step to expand unemployment to help more people, and their families, longer and with increased benefits.”
“The unprecedented increase in unemployment benefit applications over the last month signals the destabilizing impacts the Covid-19 virus has had on families across the Commonwealth; they need help now," said Senate Minority Leader Bruce Tarr (R-Gloucester). “The changes in this bill will protect workers and employers and deliver a longer period of compensation to help mitigate financial harm from this pandemic."
The components of the bill are as follows:
Lifting the Cap on Dependency Allotment. This bill eliminates the 50% cap for the dependency allotment providing additional benefits to low-income families. This increase will be in addition to the $600 per week benefit add-on provided for in the CARES Act for all workers eligible for state or federal benefits.
Currently, UI recipients are entitled to an additional $25 per week for each child in the family, capped at 50% of a recipient’s base allotment. The result is that workers with particularly low allotments, such as low wage workers, can easily be capped out of receiving these additional amounts.
Non-Profit Contribution Grace Period. Presently, many non-profits self-insure for unemployment claims. This means that when layoffs in the sector occur, non-profits pay the cost of those benefits dollar for dollar at the next billing period. This bill provides a 120-day grace period for non-profits to make these contributions. This delay will allow the state to review additional changes that are warranted to mitigate the impact on non-profits. The CARES Act provides 50% reimbursement for self-insured benefit payments during the Coronavirus crisis.
Protection for Employers. Employers who participate in UI pay contributions based on their layoff experience. Like other forms of insurance, employers that are more likely to have workers use unemployment compensation are asked to pay more in the system. The system does not anticipate a situation where employers across a number of sectors have been forced to significantly reduce their workforces due to situations outside of their control. This bill prevents layoffs related to coronavirus from negatively impacting employer’s future UI contributions.
Extending Unemployment Benefit Period. The number of weeks of unemployment compensation available in Massachusetts is tied to unemployment rates around the state. This trigger did not anticipate a situation, however, in which unemployment grows rapidly in a very short period of time. This bill ensures that the 30-week benefit period is triggered by a significant uptick in weekly unemployment claims.
An Act Providing Additional Support to Those Affected by the Novel Coronavirus Through the Unemployment Insurance System now moves to the Massachusetts House of Representatives for consideration.