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House Plans Debate on Unemployment Insurance, Minimum Wage

Posted on March 31, 2014

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.