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