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State Sends Re-Calculated Unemployment Insurance Rates

Posted on July 16, 2021

The state has re-calculated unemployment insurance (UI) taxes for 2021 to reflect a law passed in May to moderate staggering COVID-related increases to the UI solvency fund.

The Massachusetts Department of Unemployment Assistance notified employers Thursday that it has removed COVID-19 related charges from the solvency fund and charged them to a newly created COVID-19 Employer Relief Account. As a result, the 2021 solvency rate has decreased from 9.23% to 1.12%.

Companies that were charged a solvency assessment on their 2021 rate notice will be credited back a portion of the solvency assessment to their account’s experience-rating reserve balance, resulting in an adjusted 2021 UI rate. Adjusted 2021 UI rates are retroactive to January 1, 2021.

The new rates will be available to employers on or after July 26, 2021 through their UI Online accounts by clicking on Account Maintenance then View Rate Notice.

“These reduced contribution rates will allow Massachusetts companies to get back on their feet as the commonwealth moved toward recovery from the pandemic,” said John, Regan, President and Chief Executive Officer of Associated Industries of Massachusetts.

“Governor Charlie Baker and the Legislature deserve tremendous credit for addressing what could have been a catastrophic legacy of the COVID recession.”

Governor Baker signed a bill on May 28 authorizing the commonwealth to shift an estimated $7.4 million in COVID-related unemployment claims from the solvency fund to the new Employer Relief Account. Those claims overwhelmed the system in 2020 as businesses closed and thousands of workers lost their jobs in the face of the pandemic.

AIM led the effort to get the bill passed.

That Relief Account will be paid off through a combination of 20-year bonds and the COVID-19 assessment on employers that will be spread out over several years.

Employer contributions for the first and second quarters of 2021 will be recalculated using adjusted 2021 UI rates and the new COVID-19 Recovery Assessment rate for every employer that previously filed the first quarter and second-quarter Employment and Wage Detail report. If applicable, credits generated from the first-quarter recalculation will decrease the amount owed for the second quarter. Any remaining credits will be applied to future amounts due.

The state says it cannot issue refunds.

Massachusetts previously extended the deadline for first-quarter and second-quarter unemployment insurance contributions to August 31. The state has also reinstated the requirement that people who collect unemployment benefits must actively search for a job.