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State Senate Accelerates Recovery with Vote to Freeze UI Rates

Posted by John Regan on Feb 10, 2011 4:02:00 PM

The Massachusetts Senate took a major step to accelerate the economic recovery today by approving legislation to freeze Unemployment Insurance rates and head off a 40 percent average UI tax increase.

Unemployment Insurance Rate FreezeThe measure now moves to the House of Representatives, where Speaker Robert DeLeo yesterday expressed the need “to ease the burden on businesses.” Governor Deval Patrick also supports the freeze, setting the stage for resolution of the unemployment insurance crisis well before first-quarter UI bills go out to employers next month.

The Senate approved the freeze by a nearly unanimous vote. Lawmakers said that a large and sudden increase in UI rates would cripple the fragile economic recovery and is not needed to maintain the solvency of the fund used to pay benefits to jobless workers.

A UI rate freeze would still leave Massachusetts employers paying approximately 10 percent more in unemployment taxes in 2011 than they did last year because of weakened experience ratings. But the jump is far less than the $260 per-employee increase that employers would suffer if the automatic move in UI rates to Schedule G that took effect on January 1 were allowed to stand.

Employers will pay an average increase of $65 per worker under the freeze measure.

“Employers commend the members of the Senate who voted to approve this measure, which will help  put Massachusetts residents back to work,” said Richard C. Lord, President and Chief Executive Officer of AIM.

“We particularly appreciate the leadership of Senate President Therese Murray; Ways and Means Chair Stephen Brewer and Vice Chair Steven Baddour; Labor and Workforce Development Chair  Dan Wolf; and Minority Leader Bruce Tarr – all of whom worked with AIM to resolve this important issue.”

A rate increase is unnecessary and excessive now that the financial position of the UI Trust Fund is improving after two years of heavy demand caused by more than 8 percent unemployment. A significant decrease in the number of claims for unemployment prompted state officials in December to revise their estimate of the Trust Fund balance from a negative $302 million to a positive $12.7 million.

"Many of us ran on programs last year of jobs, jobs, jobs. This is a very important action we can take to set the tone for this commonwealth. Paul Tsongas once said you cannot love the employee and hate the employer," Brewer told his colleagues during the Senate debate.

Governor Patrick, who recently expressed reservations about a freeze, expressed support for the Senate bill in a statement Wednesday night.

“The Patrick-Murray administration supports the rate freeze, and believes that additional reforms are necessary in the future,” said Alex Goldstein, press secretary to the governor.

AIM looks forward to working with the governor and state lawmakers to accomplish those additional reforms. Employers seek structural changes to the UI system that include reducing the maximum duration of benefits to 26 weeks and increasing from 15 to 20 weeks the period that employees must work to qualify for benefits.

Topics: Associated Industries of Massachusetts, AIM, Massachusetts senate, Unemployment insurance, Massachusetts Unemployment Insurance, Senate President Therese Murray

Senate Committee Approves Unemployment Insurance Rate Freeze

Posted by John Regan on Feb 9, 2011 4:11:00 PM

The Senate Ways and Means Committee today approved legislation freezing Unemployment Insurance rates, a move that could head off a devastating 40 percent average UI tax increase facing employers next month.

Unemployment InsuranceThe full Senate is expected to debate the measure on Thursday. House Speaker Robert DeLeo indicated that his chamber would move quickly on the bill and a spokesman for Governor Deval Patrick told Statehouse News Service tonight that "The Patrick-Murray administration supports the rate freeze, and believes that additional reforms are necessary in the future."

A UI rate freeze would still leave Massachusetts employers paying approximately 10 percent more in unemployment taxes in 2011 than they did last year because of weakened experience ratings. But the jump is far less than the $258 per-employee increase that employers would suffer if the automatic move in UI rates to Schedule G that took effect on January 1 were allowed to stand.

Many lawmakers believe that a large and sudden increase in UI rates would cripple the fragile economic recovery and is not needed to maintain the solvency of the fund used to pay benefits to jobless workers.

AIM, which has lead efforts by employers to secure a rate freeze, commended Senate leaders and members of the Ways and Means Committee  for a vote that will strengthen the state economy and accelerate job growth. The association looks forward to working with legislative leaders and Governor Patrick to finding long-term solutions to the unemployment insurance situation.

“Senate President Therese Murray, Ways and Means Chair Stephen Brewer and Vice Chair Steven Baddour have sent an unmistakable message that the commonwealth is committed to  putting people back to work,” said Richard C. Lord, President and Chief Executive Officer of AIM.

Lord said a rate increase is unnecessary and excessive now that the financial position of the UI Trust Fund is improving after two years of heavy demand caused by more than 8 percent unemployment. A significant decrease in the number of claims for unemployment prompted state officials in December to revise their estimate of the Trust Fund balance from a negative $302 million to a positive $12.7 million.

“If Massachusetts continues to see a decline in benefit payments, even on the current schedule, the fund could be solvent at the end of 2011. And even if the fund is insolvent at the end of 2011, President Obama is expected to recommend allowing states to continue to borrow from the federal government – interest free – through the end of 2012,” Lord said.

The freeze would spare employers from a move to Schedule G that would raise average annual Unemployment Insurance rates from $646 to $904 per employee.  Schedule G would have increased overall UI contributions from Massachusetts employers from $1.576 billion to $2.235 billion.

All of those increases would come on top of a 50 percent jump in the assessment on employers for a fund that provides medical insurance to unemployed people. The Unemployment Health Insurance Rate Review Board voted in December to raise the employer contribution rate for the Medical Security Trust Fund from $33.60 to $50.40 per employee in an attempt to close a deficit that is projected to reach $95 million by midyear.

Lord said AIM will continue to push for structural reforms to the UI system, including reducing the maximum duration of benefits to 26 weeks and increasing from 15 to 20 weeks the period that employees must work to qualify for benefits.

Topics: Associated Industries of Massachusetts, AIM, Massachusetts senate, Massachusetts Unemployment Insurance, Senate President Therese Murray

AIM HR Professionals Enjoy Closeup View of Public Policy

Posted by Christopher Geehern on Jun 11, 2010 1:47:00 PM

Editor's Note: Sixty human resource professionals toured the Massachusetts State House, discussed issues with senior state policymakers and met with AIM staff yesterday during the first-ever Day on Beacon Hill for participants in the AIM Human Resource Roundtable program.

Two member participants - Kelly A. Palmer, Human Resources Specialist for Interprint Inc. in Pittsfield, and Maria A. Prado, Director of Human Resources for Rex Cut Products Inc. in Fall River - agreed to share their impressions. Visit our Web site to view more photos.

Kelly Palmer
Interprint Inc.

Yesterday's excursion to the State House seemed a grown-up version of a social studies field trip with a resonating effect. As employers trying to do business in Massachusetts, we must react to the decisions made on Beacon Hill daily, so being in the building where these decisions are made created a concrete connection between us as employers and our elected officials.

It was interesting to see that when polled about prior visits to the State House, for many in the room, it was their first. That fact is important on a number of levels. Imagine yourself approaching the gold-domed formidable structure on Beacon Hill, clearing the metal detectors upon entering and following the artfully designed mosaic-tiled floors to your meeting room. And what a meeting room it was! Symbolic of the Commonwealth's past successes, defeats and history of perseverance in a variety of circumstances, State House Room 437 showed the aftermath of leaks and let's just say a less than pristine carpet. But it also served as a place to conduct business, to meet with both familiar faces and new ones, to come together as a business community and be heard by some public officials on the side of employers. Despite the room's aesthetics, it maintains its important purpose - allowing a space to speak and to be heard, to have meaningful conversations, so crucially important to the governmental process.

The opportunity to speak with Senators Richard Tisei and Michael Knapik, Secretary Joanne Goldstein and Representative Michael Rodrigues bridged a gap of sorts that we as separate businesses and communities may fall into when concentrating our energies on successfully running our operations. So often in our Roundtables it's as though our issues and concerns are isolated in our own communities. But by bringing our Roundtables together, it's easy to see that our challenges are not unique to us and are shared across the Commonwealth. From this experience, I believe participants will be much more likely to contact their senators and representatives to establish a relationship that may be the first step in overcoming some of the hurdles hampering businesses in Massachusetts.

The experience was certainly worthwhile and I was happy to learn that AIM is planning to conduct a similar event in the future. It was well-orchestrated, right down to John Regan's detailed and entertaining tour of the State House (including rubbing Gov. Wolcott's well-worn right foot for luck); a cameo appearance by Tom Jones, obviously missed by long-time AIM members, as suggested by the applause he received when Secretary Goldstein mentioned that he works in her office; and the warm reception at the AIM offices. It was a day well-spent and certainly worth replicating in the future!

Maria Prado
Rex Cut Products Inc.

Our merry group of Taunton "Roundtablers" set out early Thursday for our mini excursion to the State House.  As we rode in on the "T" we were all excited about getting a little break from our busy schedules for our first-ever field trip together.  None of us had any great expectations, instead concentrating on the trip itself and enjoying the day. 

When we arrived at the State House, however, we realized just how important our visit was.  As we were welcomed in the conference room filled with Human Resources colleagues from around the state it was obvious to everyone just how respected AIM is to the political community.  Hearing each speaker talk about how important it is to them to have input from local business when making the many decisions they do really hit home to me.  It proved to me, as I always believed, that one person can make a difference and that it is not only our job to voice that opinion but also a privilege to be able to do so.

In addition to the power we have as individuals, it was clear to all of us who attended the event the importance of having the ability to speak as a larger voice, as a member of such a well respected organization as AIM.  Clearly their presence on the Hill is something we should all be thankful to have.

Following the speeches, AIM encouraged us to visit our local senators and representatives.  I was able to meet with Senator Marc Pacheco, who was not only gracious enough to spend a good portion of the hour talking with me and with two other colleagues, but also seemed appreciative that we took time out of our busy schedules to meet with him.  We had our picture taken by the Senate photographer and received a grand tour of the Senate chambers.

Thank you, AIM, for organizing such an eye opening experience for our group. It was well worth the trip and would gladly attend again.

Topics: Massachusetts Legislature, Associated Industries of Massachusetts, AIM, Massachusetts senate, Human Resources

Unemployment Insurance Amendments Fall Short of Reform

Posted by John Regan on May 21, 2010 3:44:00 PM

Two proposed Senate budget amendments designed to overhaul Unemployment Insurance rates in Massachusetts should be debated as part of a larger reform of the UI system.

One amendment filed by Senator Karen E. Spilka would raise the wage base upon which UI taxes are calculated, freeze the overall rate for three years at Schedule D, and tie more closely the rates paid by employers to the frequency with which those employers have work force reductions.

The second amendment, filed by Senator Thomas M. McGee, would index the taxable wage base to the rate of inflation. Both proposals are scheduled for discussion next week as part of debate on the Senate's proposed Fiscal Year 2011 state budget.

AIM has long supported comprehensive overhaul of the Unemployment Insurance system, but believes the two amendments focus too narrowly on rates and benefit expansion, and therefore fall short of the broad reform needed to help Massachusetts employers remain competitive. Employers also believe that lawmakers should debate UI reform on its own merits, not as part of the budget.

Unemployment Insurance is one of many areas in which Massachusetts employers struggle with some of the highest costs in the nation. One of the reasons is that the Massachusetts UI system includes a far more generous benefit structure than other states - Massachusetts is the only state, for example,  to provide 30 week of jobless benefits at the standard benefit amount.

Employers share some common ground with the proposed Spilka amendment on making companies that use the Unemployment Insurance system pay higher rates than those that do not. AIM believes that employers who seldom have layoffs should not subsidize the cost of unemployment benefits for companies that regularly trim payrolls.

But increasing the taxable wage base from $14,000 to $20,900 and indexing that base to inflation without simultaneously addressing benefit costs risks placing the system on "autopilot" with little prospect of real reform. Employers already struggling with the economic downturn, soaring health insurance premiums and other challenges need policymakers to examine all of the factors driving up UI rates.

UI costs have risen sharply during the past two years as the recession pushed the Bay State's jobless rate past 9 percent and increased pressure on the Unemployment Insurance Trust Fund. Governor Deval Patrick in February signed a bill limiting the average UI tax increase faced by Massachusetts employers to $111 per employee in 2010. The measure averted an automatic increase of $252 per employee that would have taken effect had the Legislature and administration not acted.

AIM urges Senators to reject the two Unemployment Insurance amendments. We look forward to working with lawmakers to develop comprehensive reform for the UI system.

Topics: Associated Industries of Massachusetts, AIM, Massachusetts senate, Massachusetts unemployment, Massachusetts Unemployment Insurance

House Seeks Improvement to Fair-Share Health Reform Calculation

Posted by Eileen McAnneny on May 11, 2010 10:34:00 AM

The Massachusetts House of Representatives last week addressed one of the most common employer frustrations with the 2006 health reform law by passing a measure that would remove employees who carry insurance through a spouse or other source from the "fair-share" take-up rate calculation.

The amendment to the House's budget plan for Fiscal Year 2011 represents a victory for employers concerned about being penalized for offering insurance to people who already have access to health care. The measure now moves to the state Senate.

As part of the Massachusetts health care reform law passed in 2006, employers that are "non-offering" are required to make a fair share contribution toward the cost of caring for the uninsured. The goal is to spread the cost of covering uninsured people, since  employers who do offer insurance already contribute to health care for the uninsured through a surcharge on every bill for health care services.

The law requires a company with more than 11, but fewer than 50, full time equivalents (FTE) to:

  • offer health insurance to its employees and have at least 25 percent of those employees participate in the company health plan; or
  • offer to cover at least 33 percent of the cost of an individual plan, regardless of how many employees actually take it.

Employers with more than 50 FTEs must meet both prongs of the test, with some exceptions.

The requirement that 25 percent of employees accept a company's insurance coverage has been a source of frustration for employers because the rule makes no provision for workers already covered by a spouse's plan, a parent's plan, a veteran's plan, Medicare, Medicaid, or a plan due to a disability or retirement.  A 55-employee company, for example, at which 10 workers join the company health plan and 45 workers have insurance from other sources would fail the fair share test and pay an assessment. The House amendment would exclude the 45 workers from the take-up calculation.

The Patrick Administration has in recent years expanded the number companies subject to the fair share contribution and the Division of Unemployment Insurance Assistance has become aggressive in auditing companies.  The stepped-up activity has prompted employers to give lawmakers an earful about the fair share process.

Several employers testified recently before the Legislature's Small Business and Economic Development Committee about how one-sided the process is for them and what a headache they face in trying to comply with the law.  The two committee chairs, Senator Michael O. Moore and Representative Linda Dorcena Forry, heard the complaints and have expressed support for the fair share changes contained in the House amendment.

The amendment "will ensure that businesses, which are making legitimate health care offers to their employees, are not unfairly penalized by employing persons who already have health care. We're hopeful that the Senate will take similar action when they complete their budget in two weeks," Representative Forry wrote on her blog.

AIM agrees and urges the Senate to approve the same amendment.

Be sure to visit the AIM Online Health Insurance Resource Center for more information about health reform, managing health insurance costs and an upcoming series of seminars on the interaction of federal and state reform laws.

Topics: Massachusetts Legislature, Associated Industries of Massachusetts, Health Care Reform, AIM, Massachusetts senate, Health Insurance, Health Care

Senate Rejects Flawed Amendment During Economic Development Debate

Posted by Brad MacDougall on Apr 8, 2010 3:04:00 PM

This afternoon the Senate rejected a fundamentally flawed proposal which was mislabeled "Economic Development, Transparency and Fiscal Accountability."

Amendment #69 was one of several amendments under consideration during today's deliberations of the Senate plan for economic development outlined in S.2345.  AIM appreciates the expressed action of the Senate leadership and members who rejected this harmful amendment.

Yesterday, AIM's Eileen McAnneny, Senior Vice President for Government Affairs, sent a letter to Senate President Murray expressing our members' strong opposition and outlined multiple negative impacts of this amendment.  McAnneny argued that "the proposal would ultimately eviscerate the long-held and fundamental policy of Massachusetts to protect the confidentiality of taxpayer information."

AIM argued that the amendment conflicts with the intent of S.2345 to make the government more business friendly and efficient so that it does not impede job creation in any way.

Strangely, a handful of Senators voted in support of Amendment #69 which would add enormous new administrative costs to employers in addition to creating another unfunded mandate for the municipalities in the Commonwealth at a time when both are struggling.  Those legislators, who voted in support of the amendment, simply ignored the fact that no other state in the nation has taxpayer-specific information disclosed on a website for any and all business expenditures.

Prior to the Senate's debate of S.2345 and the 95 amendments, AIM's John Regan, Executive Vice President for Government Affairs, sent a letter to Senate President Murray and every member of the Senate to express the association's overall position relative to specific amendments that would harm the Massachusetts business climate or would provide relief and improve the business climate.

AIM supported amendments that would change the negative impacts of the harmful "treble damages" and "independent contractor" statutes in addition to an amendment to curb the Patrick Administration's "solar carve-out" regulations, which will now retroactively add millions of unnecessary dollars to electricity bills across the commonwealth.   Following the Senate's rejection of the amendment, Regan noted that the proponents pushing this legislation have again advocated for another "Massachusetts only cost of doing business."

Watch the formal Senate debate live  as members continue to debate the economic development legislation and a supplemental budget this afternoon.  AIM will continue to monitor the ongoing Senate debate and will provide more thorough analysis.

Topics: Independent Contractor Law, Massachusetts senate, Employment Law, Economic Development, Senate President Therese Murray, Business Costs

Senate Economic Development Plan has Much to Like

Posted by John Regan on Feb 8, 2010 2:54:00 PM

Massachusetts employers will find plenty to like about the Economic Development Plan filed today by Senate President Therese Murray and Senator Karen Spilka. The bill is long on the kind of common sense management discipline needed to make state government run more like a business. It's an approach that is desperately needed as the Massachusetts economy struggles to recover from the global recession.

Employers should read a summary of the bill posted on AIM's Web site.

The plan contains measures that employers use every day. It creates a process to eliminate state agencies that are no longer needed. It requires the establishment of a performance management system for state officials who work in economic development.  It consolidates agencies and eliminates redundancies. It strengthens the current requirement that agencies seeking to adopt new regulations file a statement showing the impact those regulations will have on small business. And it expands the definition of a small business to include manufacturing companies with fewer than 500 employees.
 
The ultimate objective is to eliminate miles of red tape for employers who currently confront a complex labyrinth of alphabet-soup bureaucracies when trying to obtain services or information from the commonwealth.

AIM has supported many of the ideas in the bill as part of our Common Wealth agenda to create jobs and economic opportunity in Massachusetts. Common Wealth calls, among other things, for predictable and responsible state fiscal policy:

"We do not ask state government to do anything that every Massachusetts employer or family does not do every day - develop a multi-year budgeting plan, live within your means, reduce expenses during downturns, find efficiencies and develop new and creative ways to deliver services."

AIM commends Senate President Murray and Senator Spilka for working diligently to come up with a bill that appears to "get it right." We look forward to working with the Legislature to finalize a plan that paves the way for economic recovery in the commonwealth.

Topics: Employers, Massachusetts senate, Economic Development, Massachusetts

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