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Unemployment Insurance Rates Frozen - Finally

  
  
  

Governor Deval Patrick today signed an Unemployment Insurance rate freeze for 2014, eliminating a $500 million increase on employers that took effect January 1.

StateHouse-resized-600The measure freezing UI contributions at the current Schedule E will still leave the fund used to pay benefits to unemployed people with a balance of approximately $800 million. It marks the sixth consecutive year in which the governor and Legislature have rolled back an automatic increase in employer UI taxes.

“It’s a terrific day for the Massachusetts economy,” said Richard C. Lord, President of Associated Industries of Massachusetts, which led the effort to secure a rate freeze.

“We commend Governor Patrick and the Legislature for approving the freeze before first-quarter Unemployment Insurance bills are due. It’s an action that will prime the pump for job growth and eliminate the potential of Massachusetts having the highest UI rates in the country.”

Employers now look forward to the debate over long-term structural changes to the commonwealth’s UI system. The Senate and House of Representatives have passed separate reform bills that contain a new rate table that decreases the financial burden on high-rated employers with low workforce turnover; multiple-year rate freezes; and an increase to the wage base upon which benefits are calculated.

With the rate issue resolved, employers must now engage with the UI system to settle accounts for the first quarter of 2014. The deadline for filing first quarter taxes is May 30, 2014.

According to the Massachusetts Division of Unemployment Assistance (DUA):

  • All employers must submit employment and wage detail no later than April 30.
  • The rates will be loaded the first two weeks in May.
  • During the week of May 19, the system will open back up for employers to make their quarterly contributions.
  • Contributions are due by May 30.

DUA is updating its Web site to reflect the new schedule and staff members are fully aware of the timeline in case employers have any questions. AIM will inform member employers if any element of the timeline changes.

The division indicates that it will work with individual employers seeking deferrals.

For the first and second quarters, an employer may check off the deferral option and defer up to one third of the contributions due to the following second and third quarters respectively. You may file and pay online by logging into your account at www.mass.gov/dua.

It is your responsibility to file the report before the due date.

If you fail to file on the due date, you may be assessed a penalty. By law, you will be charged interest on all contributions paid after the due date. The interest is 12 percent per year. DUA charges interest on the contributions due starting from the due date until the payment date.

Conversely, the Voluntary Contribution option allows experience-rated employers to make additional UI contributions to reduce their UI contribution rate for the forthcoming calendar year.The Voluntary Contribution process for this year will also be a manual process.

To qualify for the Voluntary Contribution program, an employer:

  • must be eligible for experience rating;
  • must have submitted all Employment and Wage Detail Reports; and
  • must have paid all Unemployment Insurance contributions, interest, and penalties to date.

What is a Job Applicant's College Degree Worth?

  
  
  

How can an employer judge what a job applicant’s college degree is worth?

How, for that matter, can the college itself tell how good its educational programs are, and how to improve them?

The public colleges and universities of Massachusetts, which received mixed grades for job preparation on a recent employer survey co-sponsored by AIM, are working to answer those questions.

FreelandIt's an undertaking of vital importance to the economic future of the commonwealth, Higher Education Commissioner Richard M. Freeland (right) told AIM’s Public Affairs Council last Friday, because by 2020 some 72 percent of jobs in the state will require a college education, and the public system has become the dominant source resident graduates.

Massachusetts has undertaken an ambitious effort to measure what college students have learned and what they can do. The idea is to apply those measurements across institutions and states to compare the effectiveness of college programs, and eventually of individual instructors.

Unlike the input-heavy accreditation process, or exit exams for basic academic skills, the new approach will evaluate actual student coursework. After being tested last year on six Massachusetts campuses, the model is being extended to nine other states, with backing from major national education organizations. Such an assessment and accountability system will be especially valuable for institutions that cannot be judged by admissions numbers or research grants.

The initiative is part of the Board of Higher Education’s Vision Project, intended to move Massachusetts public higher education to a position of leadership among state systems in seven areas: college participation, college completion, student learning, workforce alignment, preparing citizens, research, and closing achievement gaps.

Presenting the project's year-two report, "Within Our Sights," Freeland was candid about how far the public higher education system has to go, but also noted areas of continuing success  in the areas of participation and research. Partial restoration in the Fiscal Year 2014 state budget of overall system funding, which suffered severe cuts during the fiscal crisis (to the extent that, for example, 80 percent of community college courses are currently taught by adjunct faculty, to the detriment of student support and advising) is important in itself, and includes a key initiative to base community college funding more heavily on performance.  A pilot project at Bridgewater State University demonstrated that intensive support services can close achievement gaps between students of differing backgrounds.

AIM member-employers are deeply concerned with the preparation of the state's future workforce – and with their own ability to assess that preparation. As taxpayers, we all want to see state resources used effectively and efficiently. As citizens (and parents) we value education and the opportunity it brings. We commend the constructive candor of the Board of Higher Education, and the efforts of the commissioner working with campus administrators and faculty to move the system forward.

AIM looks forward to reporting to employers on the progress of the measurement initiative.

How Does Technology Affect Productivity?

  
  
  

"Has technology allowed your company to produce more goods or provide more services than a decade ago with the same or fewer employees? Can you quantify the economic effect?"

ProductivityOn AIM's March Business Confidence Survey, 62 percent of the employers who responded said "yes" to the first question. The second question proved harder to answer for many.

The 37 percent reporting no significant impact were almost all smaller firms (fewer than 100 employees) and were largely in services or other non-manufacturing sectors, although there were a few manufacturers – "everything is still handmade" said one.  A few members chose "not applicable" either because they interpreted the question narrowly or because they were not in business 10 years ago.

Those who were able to quantify gains often reported productivity increases in the 10-25 percent range, but one manufacturer doubled output without adding workers, and a non-profit service provider more than tripled productivity. Some manufacturers noted that productivity improvements did not strengthen their bottom lines due to downward pressure on prices, while companies in various services industries cited offsetting costs from new regulations.

Respondents' comments revealed the complexity of technology's impact. One noted that although productivity per se was unchanged, it could now offer an expanded range of services. "Not 'more' … just better" was a recurrent theme.

"We are handling requirements for new customers that we would never have been able to handle with our legacy systems," have the "ability to market to a larger audience," can "identify more jobs to bid on" thanks to new technology, respondents said.  In the construction sector, better cost estimation is key: "You cannot operate today without a good software program to control cost and show market trends."

The effect on staffing levels was mixed; the largest group of employers seems to have held steady, others downsized, and some reported adding jobs as a result of technology.  

Conference Committee OKs Unemployment Insurance Rate Freeze

  
  
  

A Beacon Hill conference committee last night recommended that the Massachusetts Legislature freeze Unemployment Insurance rates for 2014, a move that would spare employers from an unnecessary 33 percent tax increase that took effect January 1.

Unemployment InsuranceThe measure now moves to the full Senate and House of Representatives, both of which have already approved a freeze as part of separate pieces of legislation. Expedited passage by the two chambers would meet a priority of Associated Industries of Massachusetts (AIM) to secure a freeze before first-quarter Unemployment Insurance tax bills go out to employers.

“AIM and its 4,500 member employers commend the legislative conference committee for advancing the Unemployment Insurance rate freeze. We urge the House and Senate to pass the freeze as soon as possible and Governor Patrick to sign it,” said Richard C. Lord, President and Chief Executive Officer of AIM.

First-quarter UI payments are generally due by April 30, but the Massachusetts Department of Unemployment Assistance Advisory Committee recently postponed the deadline until May 30.

The automatic rate $500 million Unemployment Insurance tax increase facing employers came despite the fact that the fund used to pay benefits to jobless residents enjoys a healthy balance of $800 million. While House and Senate members agree on the freeze, they have disagreed about how to wrap that freeze into a broader set of reforms to the state’s costly Unemployment Insurance system.

Separate House and Senate UI reform bills share several common elements, including a new rate table with levels added at each end of the spectrum to decrease the financial burden on high-rated employers with low workforce turnover while penalizing negatively rated employers. The bills also propose multiple-year rate freezes on the new table, and an increase to the wage base upon which benefits are calculated.

Neither reform includes provisions supported by AIM to reduce the maximum duration of benefit weeks from 30 to 26 or increase the time people must work before collecting benefits.

 

House OKs Unemployment Reform; Freeze Remains Priority

  
  
  

The Massachusetts House of Representatives last night joined the state Senate in passing legislation to freeze Unemployment Insurance rates and avert a $500 million tax increase on employers that took effect on January 1.

Unemployment InsuranceIssue closed right? Well, not so much. The two branches disagree about how to wrap that freeze into a broader set of reforms to the state’s costly UI system, so employers still find themselves staring down the barrel of a 33 percent jump in UI taxes.

Lawmakers will eventually work out their differences in a conference committee, but that process is complicated because House and Senate have passed different bills dealing with UI reform and a minimum-wage increase.

“The priority for the Legislature must be to freeze Unemployment Insurance rates for 2014 before employers pay first-quarter UI taxes. Otherwise, the economy will be saddled with an unnecessary tax increase at a time when the fund used to pay jobless benefits is financially stable,” said Richard C. Lord, President and Chief Executive Officer of Associated Industries of Massachusetts.

The House voted 123-24 last night to pass a bill that would freeze UI rates, introduce modest reforms of the Unemployment Insurance system, and raise the Massachusetts minimum wage from the current $8 per hour to $10.50 per hour over three years. The Senate passed legislation in February to increase the minimum wage to $11 per hour over three years and then link it to the rate of inflation.

The House UI reform package would:

  • Expand the wage base upon which UI benefits are calculated from $14,000 to $15,000 in 2015.
  • Incorporate an expanded rate table previously passed by the Senate that would make rates more dependent on the hiring and firing record of individual companies.  Rates for 2015, 2016 and 2017 would be frozen at Schedule C on the new table.
  • Retain the current one-year window for determining the experience rating of employers.
  • Prohibit self-employed “persons of influence” from laying themselves off on a seasonal basis and collecting unemployment benefits.

Neither the House nor the Senate bills include provisions supported by AIM to reduce the maximum duration of benefit weeks from 30 to 26 or increase the time people must work before collecting benefits. AIM opposes increases to the state minimum wage.

Lord called the House vote a “step in the right direction” toward addressing UI rates that are among the highest in the nation.

“We are gratified that both the House and Senate have passed Unemployment Insurance reform. Employers did not get everything they wanted, but we look forward to continuing the conversation with Beacon Hill lawmakers in the months ahead,” Lord said.

Need more information? Join the AIM Brown Bagissues Webinar on April 9 at Noon.

Employers Maintain 'Show Me' Attitude Toward Economy

  
  
  

Massachusetts employers might just as well be from Missouri these days as they continue to exhibit a “show me” attitude about the strength of the economy.

BCI.March.2014The Associated Industries of Massachusetts Business Confidence Index rose 1.1 points in March to 51.1, holding close to a neutral 50 on its 100-point scale. Bay State employer sentiment has remained locked for 18 months in a narrow range between optimism and pessimism as both the state and national economies have failed to develop sustained growth momentum.

"Business confidence in Massachusetts has been in neutral range for a year, dipping below neutral when there was a threat of federal default and when the government shut down in October, but otherwise with not much upside," said Raymond G. Torto, global Chairman of research at CBRE and Chair of AIM's Board of Economic Advisors (BEA).

Torto and other analysts point to several factors that are holding down confidence, including a generally negative view of national conditions, deadlocked national politics, weak readings among small employers and hiring levels that have been less robust than might be expected during a recovery period.

The AIM confidence index is up a point from its level of last March, but below where it was as recently as September.

The Current Index, tracking employer assessment of existing business conditions, added nine-tenths of a point from February to 49.3, while the Future Index, measuring expectations for the next six months, rose 1.2 to 52.9.

"The numbers are a bit better than February's, and last March's, but still reflect some fear of economic uncertainties," remarked Sara L. Johnson, Senior Research Director of Global Economics at IHS Global Insight, a BEA member. "The fundamentals driving consumer and business spending (incomes, balance sheets, and credit availability) are improving."

The U.S. Index of business conditions prevailing nationally rose 1.9 points in March to 46.2, and the Massachusetts Index of conditions within the commonwealth had a similar gain to 48.6.

Neither increase ignited much hiring, the survey shows. The Employment Index lost 1.3 points to 50.1. Employers, many of them facing pressure on prices, are reluctant to add staff.

"It is increasingly clear that lack of confidence among smaller employers is a serious concern for Massachusetts," said Richard C. Lord, AIM’s President and CEO, a BEA member.

"In our March survey, larger employers were positive about business conditions in our state, but those with 25 employees or fewer were markedly negative. Ours is predominantly a small-employer economy, and our hopes for creating jobs to bring down the unemployment rate – particularly in regions of the commonwealth that are being left behind in the recovery – depend on the growth of those small firms."

House Plans Debate on Unemployment Insurance, Minimum Wage

  
  
  

The Massachusetts House of Representatives is scheduled to debate a bill Wednesday that would reform Unemployment Insurance and increase the state minimum wage, but continued wrangling on Beacon Hill makes it uncertain when either of those matters will land on the governor’s desk.

Unemployment InsuranceEmployers, meanwhile, continue to confront an unnecessary $500 million increase in Unemployment Insurance taxes for 2014, even though both the House and Senate have separately approved UI rate freezes. Associated Industries of Massachusetts (AIM) today renewed its call for lawmakers to pass a stand-alone rate freeze that would avert a 33 percent rate increase before employers have to pay it.

“Time is running out to address a catastrophic tax increase that could dampen an already tentative economic recovery. The House and the Senate agree that UI rates should be frozen for 2014 - let’s pass that freeze and then engage in meaningful debate about broader UI reforms and the minimum wage,” said John Regan, Executive Vice President of Government Affairs for AIM.

The House bill to be debated this week will take the form of an amendment to legislation governing domestic workers. The measure would:

  • Freeze Unemployment Insurance rates for 2014.
  • Expand the wage base upon which UI benefits are calculated from $14,000 to $15,000 in 2015.
  • Incorporate an expanded rate table previously passed by the Senate that would make rates more dependent on the hiring and firing record of individual companies.  Rates for 2015, 2016 and 2017 would be frozen at Schedule C on the new table.
  • Retain the current one-year window for determining the experience rating of employers.
  • Prohibit self-employed “persons of influence” from laying themselves off on a seasonal basis and collecting unemployment benefits.
  • Increase the Massachusetts minimum wage over three years, from the current $8 per hour to $9 per hour on July 1, $10 per hour on July 1, 2015, and $10.50 per hour in July 1, 2016. The minimum wage would not be indexed to inflation, but would always be at least 40 cents per hour higher than the federal minimum.
  • Include a provision supported by AIM giving employees the option of being paid semi-monthly rather than weekly or bi-weekly.  Semi-monthly pay results in 24 pay periods per year while bi-weekly has 26 pay periods per year.

Neither the House bill, nor a Senate UI reform passed on February 6, include provisions supported by AIM to reduce the maximum duration of benefit weeks from 30 to 26 or increase the time people must work before collecting benefits.

Senate President Therese Murray warned last week the House decision to develop its own, combined UI/Minimum Wage bill could jeopardize its fate this session.

“That would compromise the timeframe greatly because then we would have to take up a whole new bill here which we’ve already done it twice and that could take as much as eight weeks or more during budget season so that’s why we were trying to prevent that from happening,” Murray told the State House News Service.

The ISO 9001 Standard - Can a Million Companies Be Wrong?

  
  
  

ISO 9001 has become the most recognized quality management credential in the world for manufacturing companies. More than one million companies in 170 countries have been certified to the standard, which is increasingly viewed as a requirement among employers looking sell products or technologies to global advanced manufacturing enterprises.

ManufacturingThe broadening acceptance of ISO among customers is finally persuading manufacturers that may have been reluctant to pursue certification because of cost or misperceptions about the registration process to finally take the plunge.

ISO 9001 provides guidance and tools for companies and organizations that wish to ensure that their products and services consistently meet customer’s requirements. It’s an operational plan.

The standard is based on quality management principles such as strong customer focus, the motivation and implication of top management, the process approach and continual improvement. The idea is to ensure that customers get consistent, good quality products and services, which in turn brings many business benefits.

An organization must perform internal audits to check how its quality management system is working. A company may decide to invite an independent certification body to verify that it is in conformity to the standard, but there is no requirement for this. Alternatively, it might invite its clients to audit the quality system for themselves.

ISO 90001 requires that a company has documented quality program that it follows. The benefits?

  • Provides a measurable advantage over competition
  • Increases sales revenue
  • Improves the bottom line
  • Improves business and process performance while managing business risk
  • Attracts investment, enhances brand reputation and removes barriers to trade
  • Streamlines operations and reduces waste
  • Encourages internal communication and raises morale
  • Increases customer satisfaction

A number of studies have identified financial benefits for organizations certified to ISO 9001. A 2011 survey from the British Assessment Bureau showed that 44 percent of their certified clients had won new business. A separate study indicated that certified organizations achieved superior return on assets compared to otherwise similar organizations without certification.

“Sales Department is making appointments with companies who would not even look at us before we had our certification. We are also looking to expand our business outside New England now. This was a great and worthwhile adventure,” said AIM member Joseph Peters, President of Universal Plastics in Holyoke, who participated in the AIM/Massachusetts Manufacturing Extension Partnership ISO 9001 collaborative.

The collaborative provides a relatively inexpensive, workshop-based program that provides systems, documentation, training and on-site consultation for companies wanting or needing to comply with ISO 9001. The program consists with seven off-site, one day workshops over a period of seven months with a minimum of four and a maximum of eight companies working together with a consultant to establish and/or upgrade their quality management system.

A “gap” assessment of each participating company is provided to identify the areas each company needs to improve.  A minimum of five on-site consulting days in addition to the training workshops are provided to each participant.

Pricing for the AIM/MassMEP ISO Collabrative is based on company size – tuition ranges from $13,500 for a company employing fewer than 50 people to $22,000 for one that employs between 250-400 people. In most cases, the Massachusetts Workforce Training Fund covers up to 50 percent of the cost to participate.

Contact your regional AIM Member Relations staff member or Brian Gilmore at 617-262-1180 for more information.

Hiring Teens for the Summer? Be Sure to Know the Rules

  
  
  

Spring is when employers think about hiring teen-agers for the summer. In fact, public officials are busy encouraging employers to hire teens as a way of provding valuable job experience to the work force of the future.

TeenJobsCropAny employer thinking about hiring children between the ages of 14 and 17 should be aware that both state and federal laws set explicit provisions regarding the hours children may work and the positions and duties they may hold. The law categorizes children by ages, 14-15 and 16-17, and recognizes that children in the older group are eligible to perform more complex/responsible workplace duties than their younger counterparts.  

With few exceptions, minors must be at least 14 years of age to work. The exceptions include babysitting, news carriers, farm workers, and entertainment (with a special state issued permit).

The list below highlights the time and occupation restrictions for children by age grouping.

Hours

Fourteen and 15-year-old minors may not be employed:

  • during school hours except as provided in approved work experience and career exploration programs;
  • between 7 p.m. and 7 a.m. except from July 1 through Labor Day, when they may work until 9 p.m;
  • more than three hours per day during school weeks, not more than eight hours per day during weeks when school is not in session;
  • more than 18 hours per school week except in approved work experience and career exploration programs, in which case, they may work 23 hours;
  • more than 40 hours per week when school is not in session;
  • more than six days per week.

Sixteen and17-year-old minors may not be employed:

  • between 10 p.m. and 6 a.m. with exceptions: when an establishment stops serving customers at 10 p.m., the minor may work until 10:15 p.m.; on nights not preceding a regularly scheduled school day they may work until 11:30 p.m.; and in restaurants and race tracks, they may work until 12 a.m. on nights not preceding a regularly scheduled school day.

  • more than nine hours per day;
  • more than 48 hours in a week; or
  • more than six days per week.

After 8 p.m., minors must be directly supervised by an adult who is located in the workplace and who is reasonably accessible, unless the minor works at a kiosk, cart, or stand in the common area of an enclosed shopping mall that has security from 8 p.m. until the mall is closed to the public.

Massachusetts maintains a useful list of the restrictions for minors between 14 and 17 years of age.

Applying for an Employment Permit

All minors under the age of 18 seeking work:

  • must complete an employment permit application and
  • obtain the permit before starting a new job.  Applications for permits are available here.

For minors who are residents of Massachusetts:

  • Permits are issued by the superintendent of schools for the municipality in which the minor lives or attends school – either is acceptable.  

For minors who reside outside the commonwealth, the permit is issued by the superintendent for the municipality where the minor’s job will be located.

No permit may be granted unless there is a specific employer, work address, and job description.

 Employer’s Responsibility

The employer must keep the original permit on file at the place of employment as long as the minor is employed at that location or until the minor reaches 18. 

If the minor's employment is terminated, voluntarily or otherwise, the employer must return the permit to the superintendent's office within two days of the termination. 

Permits are valid as long as the minor holds the job or until he/she reaches the age of 18. After that, the minor no longer needs documentation and the permit and copies may be destroyed.

Although you may choose to only hire high-school graduates, remember that some of them may be still under 18 and still be subject to the child labor laws. The law states clearly that minors who are no longer students are covered by the child labor laws in the same way that students of the same age are covered until the age of 18.

Transferring Permits

Minors may not transfer a permit given for one job to another job.  The process must begin again, even if the employer is the same but the work location has changed. An employer who wishes to employ a minor at more than one location must keep a permit on file at each business location. However, a minor does not have to apply for a new employment permit at the beginning of the school year if she or he has the same job.

Employers should leave enough time to obtain the proper documentation. The child labor laws are enforced by the Attorney General’s Fair Labor Division and there are significant fines for violations.

If you have more specific questions, please contact the AIM Hotline at 1-800-470-6277.

Employers See Disconnect Between Schools, Economy

  
  
  

Twenty years of school reform have made Massachusetts a leader in public education, yet 69 percent of the state's employers report difficulty hiring employees with the skills demanded by the modern workplace, a newly-released survey finds.

EducationOnly 20 percent of business leaders gave the K-12 education system a grade of A or B for job market preparation. 

The survey was part of a broader study conducted by MassINC Polling Group for the Massachusetts Business Alliance for Education (MBAE), with support from AIM and the Massachusetts Business Roundtable. The survey included CEO interviews and focus groups with senior executives and HR administrators. Many AIM member employers participated in the study.

The majority of employers surveyed said the public schools need significant change – 52 percent called for moderate change and 32 percent for major change, while only 10 percent chose minor or no change. The priorities for business in school reform include effectiveness of teachers (63 percent), partnerships between companies and higher education (55 percent), availability of technology in the schools (52 percent), and access for all students to computer science (49 percent).

The need for more partnerships to give students hands-on experience and awareness of career opportunities is a recurring theme that gave the study its title: "Let's get together."

The employer study was released by MBAE in tandem with another report, The New Opportunity to Lead: A Vision for Education in Massachusetts in the Next 20 Years, [full report; executive summary] prepared by, a partnership of international education experts. The New Opportunity concludes that districts, schools and instruction must be transformed if students are to compete successfully in the global economy and if Massachusetts is to remain a hub of innovation. 

 The report calls for a new approach to education reform, one that moves away from state mandates and compliance to one that drives authority and accountability down to the schools and creates conditions in which schools continuously advance their own performance.

MBAE, AIM's longtime partner in education reform, plans to launch a campaign to build support for meaningful changes outlined in the report.

Richard C. Lord, president and CEO of AIM, endorsed the findings and urged employers to become engaged in the campaign to improve educational outcomes.

“High quality public schools are the bedrock of our knowledge-based economy. The job of sustaining Massachusetts’ global leadership in innovation belongs to everyone, and that will require a thoughtful, long-range plan to maintain our competitive advantages, including our education system.”

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