Governor Signs Unemployment Insurance Rate Freeze
Posted by Rick Lord on Thu, Feb 18, 2010 @ 12:43 PM
Governor Deval Patrick today signed the Unemployment Insurance rate freeze bill, which will limit the average UI tax increase faced by Massachusetts employers to $111 per employee in 2010. The measure averts an automatic increase of $252 per employee that would have taken effect had the Legislature and administration not acted.
The freeze reduces the overall UI increase for employers by $390 million.
I thank Governor Patrick and the Legislature for freezing scheduled unemployment insurance rates for 2010. This announcement will afford employers significant savings at a time when many businesses are continuing to struggle through a tough economy.
This is the type of action AIM advocates for and will help lead to a strong business climate in Massachusetts. We look forward to a discussion on meaningful reform of the system.
The bill freezes overall UI rates at Schedule E retroactive to January 1. UI rates would otherwise have escalated automatically from Schedule E to Schedule G in the wake of dwindling assets in the fund used to pay jobless benefits.
The term "freeze" is misleading because many employers will still end up paying more UI taxes than last year. The reason is that actual Unemployment Insurance payments are based upon experience ratings, and those ratings have generally deteriorated during the past 18 months as companies have reduced their work forces in the face of the recession.
The governor's decision to sign the bill came as little surprise since he made a UI rate freeze part of a broad economic development plan announced last week. The Massachusetts Legislature gave final approval to the bill on Tuesday and the governor signed it before departing for the National Governor's Association meeting.
AIM recently issued a detailed analysis of the freeze and Governor Patrick's initial reform proposal.
Read Governor Patrick's Announcement