Opinion: Time Is of the Essence
It seems like it came out of nowhere. And, in many respects, it did.
Indeed, the bill has come due on the skyrocketing amounts of unemployment benefits being paid out in this state. And unless something happens, and quickly, small businesses that are already facing innumerable challenges brought on by COVID-19 will be hit with another that might just be too much to take.
We’re talking what’s known as the unemployment insurance (UI) solvency fund assessment, the other, often-overlooked component of the overall assessment handed down to employers to cover the state’s unemployment costs — only, it won’t be overlooked any longer.
That’s because, due to a statutory increase in the formula used to calculate an employers’ experience rating, the annual UI solvency fund assessment rate has jumped from 0.58% to a whopping 9.23% for 2021. This represents a staggering 1,591% increase in just one year, which will cost business owners thousands of dollars in additional expenses at a time when they can certainly least afford it, including those employers who were able to retain their full workforce during the pandemic.
Already, stories are circulating about companies being hit with massive increases in their assessment, hikes that could eventually stifle growth and hiring and perhaps lead to layoffs and other types of cutbacks.
With these types of impacts looming, the local business community is marshaling its forces and lobbying legislative leaders to take needed steps to ward off what could be catastrophic effects from these UI solvency fund assessments.
Letters now being circulated ask the Commonwealth to follow the lead of Maryland and other states by dedicating a portion of the federal COVID-19 relief aid Massachusetts is receiving through the American Rescue Plan Act or other available and relevant federal funds to replenish the Unemployment Insurance Trust Fund. Doing so will remove the financial burden from employers who are already struggling to survive, which in turn will help protect jobs and contribute to a strong post-pandemic economic recovery.
We urge every business owner in this region to join these efforts and make sure a loud, crystal-clear voice is heard on this. And we urge the Legislature to take this step, and any others it can take, to keep the massive unemployment bill now coming due from further devastating the business community — and the state’s economy.
The state’s businesses did not cause this problem. Indeed, a huge number of job losses resulted directly from the state’s shutdown of the economy roughly 13 months ago. At that time, state leaders, and especially the governor, did what they thought was necessary to ward off disaster.
Now, they need to ward off disaster again — in the form of more layoffs, stalled growth, and, very probably, the loss of many more businesses.
The Department of Unemployment Assistance has announced that the quarterly payments that were due April 30, which would include the new rate calculation, have been deferred until June 30. This is a good first step. State leaders now need to use this time to take the steps necessary to dedicate a portion of the federal COVID-19 relief aid Massachusetts is receiving to replenish the UI Trust Fund. They need to do the right thing for the businesses in the state, and those same businesses can help themselves by reminding them of this responsibility.
Every for-profit business in this region has skin in this game — and it’s a game they can’t afford to lose.