An obscure provision of the 2005 Massachusetts Unemployment Insurance Reform Law will next week accomplish what employers have sought for several decades – a reduction in the maximum duration of unemployment benefits from 30 weeks to the 26 weeks common in most states.
The provision mandates that if the unemployment rate drops below 5.1 percent in the 10 labor market regions of the state, then UI benefits are available for 26 instead of 30 weeks. The Executive Office of Labor and Workforce Development certified today that the jobless rate in all Massachusetts labor markets has dropped to less than 5.1 percent so new UI recipients as of next week will be able to collect for 26 weeks.
The benefit period will return to 30 weeks if during any month of a claimant's 26-week benefit period the 12-month average monthly unemployment rate in any one of the metro areas rises above the 5.1 percent threshold.
Cost savings associated with the 26-week maximum benefit period are $40 million in the first year and $84 million in the second year, state officials said
“I don’t think anyone at the time this provision was negotiated believed it would ever take effect,” said AIM President and Chief Executive Officer Richard C. Lord.
“The change underscores the fact the the duration of Unemployment Insurance remains one of the major competitive disadvantages that affect companies doing business in Massachusetts. We urge the Legislature to move to 26 weeks permanently.”