MassLive – Baker administration officials and lawmakers are working with the federal government to address the jump in unemployment insurance taxes stemming from the state’s historic number of jobless claims during the COVID-19 pandemic.
Asked about the jump in UI taxes, Gov. Charlie Baker said state and legislative officials are in contact with the federal government and with Massachusetts business leaders.
“I think everybody knows that, given the amount of unemployment we had last year it would be a challenge to come up with what I would describe as the perfect solution,” Baker said Tuesday afternoon, “but we do have some ideas about how to mitigate some of the hit.”
Massachusetts postponed the first quarter employer contribution deadline from April 30 until June 1, which gives legislators and Baker administration officials time to find a fix.
“One of the reasons we asked for the delay in making payments was so that we can process some of these ideas,” the Republican governor told reporters.
Employers are seeing thousands of dollars in increases to their unemployment taxes due to a nearly 16-fold jump in the solvency fund rate, one of several factors that can affect a business’ overall employer contribution rate.
Typically, an employer’s unemployment taxes can rise if the company lays off employees. But the onslaught of COVID-related jobless claims prompted Congress to divert COVID-related unemployment claims to a different fund so business owners who laid off employees during the pandemic wouldn’t face penalties for closing to deter community spread or abide by non-essential business closures.