Category

COVID-19

COVID-19 and UI Benefits

Massachusetts Revises 2021 Unemployment Tax Rates

The Massachusetts Department of Unemployment Assistance (“DUA”) has released revised 2021 unemployment tax rates for all employers.  In a letter to employers, the DUA announced that these revisions would be available on their website as of today and will reflect a decrease in the solvency assessment, which was a major factor in the original tax rate increases felt by employers in 2021.

Unemployment tax rates have been adjusted due to a decrease in the solvency assessment from 9.23% to 1.12% for 2021.  However, employers will now be assessed a new Covid-19 Recovery Assessment rate, which equals 10.50% of an employer’s unemployment tax rate and ranges from 0.099% to 1.509%.

The adjusted tax rates and recovery assessment rates are retroactive to January 1, 2021.

Unemployment tax payments for the first and second quarters of 2021 have been extended and are due by 3 p.m. Eastern time August 31, 2021.

The letter to employers included tax rate calculation examples and a set of frequently asked questions about adjusted tax rates and the recovery assessment.

This is exciting news for most Massachusetts employers, despite the late notice of these tax rate revisions and the addition of the COVID-19 Recovery Assessment Rate.  Nevertheless, for those employers who receive a lower tax rate for 2021 because of these revisions, they will see an overall tax decrease for calendar year 2021 as opposed to what was budgeted under the originally assigned rate.

Because the DUA is not mailing these revised notices to employers of their third-party agents, we are in the process of retrieving these from the DUA website and verifying the calculations.  We will send them out to our clients once that process is complete.

If there are any questions please do not hesitate to contact us or visit our website for the latest news and updates.

Indiana To Waive Unemployment Benefit Charges for 2022 Tax Rates

The Indiana Department of Workforce Development has confirmed that it will not include unemployment benefits charged from March 13, 2020 to June 30, 2021 when calculating employer’s unemployment tax rates for 2022.

However, this does not necessarily equate into lower tax rates in 2022 and beyond.  The frequently asked questions posted to the IN DWD website indicate that unemployment benefits charges waived from individual employer accounts in 2020 may be recovered through a mutualized unemployment tax for 2022.  Similarly, charges waived in 2021 may be recovered through a mutualized unemployment tax for 2023.

As always, we will continue to monitor this situation and provide updates as they become available.  If there are any questions please do not hesitate to contact us or visit our website for the latest news and updates.

 

Tennessee Unemployment Tax Rate Calculations to Exclude All Benefit Charges

The Tennessee Department of Labor & Workforce Development announced that unemployment tax rate calculations for the one-year period July 1, 2021 through June 30, 2022 are to exclude all unemployment benefits claimed during the COVID-19 pandemic in a measure signed by Governor Bill Lee.

Under the measure (SB 2520), unemployment benefits paid from March 14, 2021 through July 3, 2021 will not be charged to employers’ accounts for the purposes of computing the 2021-2022 state unemployment tax rate.  This is an extension of previous laws and executive orders which in total now exclude charges beginning March 15, 2020 running through July 3, 2021.

The purpose of SB 2520 is to curb a sharp increase in tax rates for the one-year period July 1, 2021 through June 30, 2022 and future years, thus allowing Tennessee employers an opportunity to reinvest in their businesses after the COVID-19 pandemic.

No action is required by employers at this time.  As always, we will continue to monitor this situation and provide updates as they become available.  If there are any questions please do not hesitate to contact us or visit our website for the latest news and updates.

Texas Unemployment Tax Rates Hold Steady for 2021

The Texas Workforce Commission announced that unemployment tax rates for 2021 will remain at pre-pandemic levels in accordance with legislative authority enacted.

As you may recall, the TWC announced in March 2021 that 2021 unemployment tax rates would be delayed while they coordinate with the Texas Legislature and the Governor’s Office to explore opportunities to keep tax rates as low as possible following the historic unemployment claims volume seen in 2020.  Our prior post relating to the March announcement can be found here.

Based on this week’s announcement from the TWC, Texas employers can expect to see lower tax rates than expected when the 2021 rates are finally released later this month.  They confirmed that the three adjustment factors included in the overall rate will remain unchanged for 2021:

  • UI Replenishment Rate = 0.18%
  • Deficit Tax Rate = 0.00%
  • Obligation Assessment = 0.03%

The purpose of holding the tax rate low is to curb a sharp increase in tax rates for 2021 and future years, thus allowing Texas employers an opportunity to reinvest in their businesses after the COVID-19 pandemic.

Here are a few quotes from TWC leadership as to why this decision was made:

“Texas employers continue to overcome the challenges of the past year and contribute to a strengthening economy.  Today’s action on UI taxes enables businesses to better focus resources on innovating and expanding jobs available to Texas workers.” – TWC Chairman Bryan Daniel

“Texas workers are eager to get back to work and help move our economy forward.  This decision to keep taxes low will encourage hiring and expand opportunities for working Texans.” – TWC Commissioner Representing Labor Julian Alvarez

“This decision gives stability and predictability to our UI tax structure.  Texas employers and Business leaders look forward to that stability especially after a year of rampant uncertainty.  This gives them the capacity they need to hire, expand and get Texas’ economy back on track.” – TWC Commissioner Representing Employers Aaron Demerson

No action is required by employers at this time.  As always, we will continue to monitor this situation and provide updates as they become available.  If there are any questions please do not hesitate to contact us or visit our website for the latest news and updates.

 

Washington Unemployment Taxable Wage Base to Rise in 2022

The Washington Employment Security Department announced today that the unemployment taxable wage base is set to rise to $62,500 in 2022, up from $56,500 in 2021.

This will be the highest taxable wage base ever implemented by any state and the first to exceed $60,000.

The ESD has historically tied the taxable wage base to the state’s average annual wage.  This causes automatic increases or decreases each year.  The average annual wage rose to $76,741 in 2020, a 10.1% increase from 2019.

In a news release, the Department said “The higher than normal increase in reported average wages can be attributed to the fact that thousands of lower-paid workers lost their jobs during the COVID-19 pandemic and higher-paid workers remained employed.  While it is common for the average wage to rise during recessions, since lower wage workers are more likely to be laid off than higher paid ones, the shift during the pandemic recession was much more dramatic than during the Great Recession.”

The average annual wage is also used to calculate weekly unemployment benefit amounts in Washington.  As of July 4, 2021, unemployment benefits will range from $295 to $929 per week.

No action is required by employers at this time.  As always, we will continue to monitor this situation and provide updates as they become available.  If there are any questions please do not hesitate to contact us or visit our website for the latest news and updates.

 

New Jersey Unemployment Tax Rate Calculations to Exclude COVID-19 Related Benefit Charges

The New Jersey Department of Labor & Workforce Development announced that unemployment tax rate calculations for the one-year period July 1, 2021 through June 30, 2022 are to exclude unemployment benefits related to the COVID-19 pandemic in a measure signed by Governor Phil Murphy.

Under the measure (AB 4853), unemployment benefits paid from March 9, 2020 through December 31, 2020 will not be charged to employers’ accounts for the purposes of computing the 2021-2022 state unemployment tax rate if the reason for separation was “virus-related”.

The law also limits the move over the next three fiscal years to higher rate schedules, which are expected to trigger due to the effect of COVID-19 UI benefits on the state’s UI trust fund balance.  It is estimated that the highest rate schedule, Schedule E+, would have been in effect for the 2021-2022 rate year, with rates ranging from 1.30% to 7.70%.

  • For the one-year period from July 1, 2021 to June 30, 2022 the assignment of SUI tax rates will move from the current Rate Schedule B, with rates ranging from 0.40% to 5.40%, to Rate Schedule C, with rates ranging from 0.50% to 5.80%.
  • For the one-year period from July 1, 2022 to June 30, 2023 the assignment of SUI tax rates will move from Rate Schedule C to Rate Schedule D, with rates ranging from 0.60% to 6.40%.
  • For the one-year period from July 1, 2023 to June 30, 2024 the assignment of SUI tax rates will move from Rate Schedule D to Rate Schedule E, with rates ranging from 1.20% to 7.00%.

The law provides that if calculation of the actual fund reserve ratio would result in the selection of a rate schedule with lower contribution rates for any of these periods, the lower rate schedule will apply.

The New Jersey Office of Legislative Services estimates that by setting lower rate schedules than dictated by the fund’s actual reserve ratio, the law will reduce revenues to the state’s UI trust fund by at least $660 million in the first year, $450 million in the second year, and $230 million in the third year relative to the contribution amounts payable under the tax schedule that would otherwise have taken effect.

No action is required by employers at this time.  As always, we will continue to monitor this situation and provide updates as they become available.  If there are any questions please do not hesitate to contact us or visit our website for the latest news and updates.

Vermont Unemployment Tax Rate Calculations to Exclude COVID-19 Related Benefit Charges

The Vermont Department of Labor announced that unemployment tax rate calculations for the one-year period July 1, 2021 through June 30, 2022 are to exclude unemployment benefits related to the COVID-19 pandemic in a measure signed June 1, 2021 by Governor Phil Scott.

Under the measure (SB 62), unemployment benefits paid during calendar year 2020 will not be charged to employers’ accounts for the purposes of computing the 2021-2022 state unemployment tax rate if the reason for separation was “virus-related”.

Employers may also be relieved of charges for benefits claimed in 2021 when the claims are related to a business closures required by a public health mandate, the employer temporarily laid off quarantined employees, or the employer voluntarily stopped operations because of workplace exposure to COVID-19.  The Commissioner of the Department is preparing procedures and an application for employers to use to apply for relief by July 1, 2021.

Additionally, the Department will not take into account unemployment benefits paid in 2020 when determining the tax rate schedule to take effect July 1, 2021 or future fiscal years.

The provisions are to prevent unemployment tax rates from increasing more than would be necessary to replenish the state unemployment trust fund.

No action is required by Vermont employers at this time.  As always, we will continue to monitor this situation and provide updates as they become available.  If there are any questions please do not hesitate to contact us or visit our website for the latest news and updates.

Nevada Unemployment Tax Rate Calculations to Exclude All Benefit Charges

The Nevada Department of Employment, Training & Rehabilitation announced that unemployment tax rate calculations for 2022 are to exclude all unemployment benefits claimed during the second and third quarters of 2020 in a measure signed June 2, 2021 by Governor Steve Sisolak.

Under the measure (SB 75), unemployment benefits paid from April 1, 2020 to September 30, 2020 will not be charged to employers’ accounts for the purposes of computing the 2022 state unemployment tax rate.

This measure does NOT affect the 2021 unemployment tax rate computation.

The purpose of SB 75 is to curb a sharp increase in tax rates for calendar year 2022 and future years, thus allowing Nevada employers an opportunity to reinvest in their businesses after the COVID-19 pandemic.

As always, we will continue to monitor this situation and provide updates as they become available.  If there are any questions please do not hesitate to contact us or visit our website for the latest news and updates.

 

Update: Massachusetts Issues Further Guidance Relating to Unemployment Taxes for 2021

On Friday, May 28, 2021, Governor Charlie Baker signed legislation that will exclude all COVID-19 related benefits paid between March 10, 2020 and August 1, 2021 from the unemployment insurance solvency rate calculation.  As a result, the Massachusetts Department of Unemployment Assistance will recalculate and issue revised 2021 unemployment tax rate notices by late July.

In a statement released by the MA DUA yesterday, it was intimated that the revised 2021 rates would more closely align with the 2020 rate calculation in most cases but that has yet to be confirmed.  The DUA also stated that until employers receive their revised 2021 unemployment tax rate in late July, employers are advised to use their 2020 tax rates, retroactive to January 1, 2021.

Also as part of this legislation, the DUA will be including a quarterly COVID-19 recovery assessment for all experience-rated employers, retroactive to January 1, 2021.  This is part of the DUA’s plan to recover the cost of benefits paid by the UI Trust Fund in 2020 & 2021 during the COVID-19 crisis and more manageably spread these costs over time.  It is unclear as to the impact this new assessment will have on the revised tax rates at this time.

In addition to the issuance of revised 2021 tax rates, the DUA has again extended the first quarter 2021 contribution deadline, along with an extension of the second quarter 2021 contribution deadline.  Both contributions are now due on August 31, 2021.

As you may recall, just days before this legislation was signed, the DUA had announced and extension of the first quarter 2021 contribution deadline from April 30, 2021 to August 2, 2021.  This happened just weeks after the DUA announced on April 15, 2021 that the same deadline had been extended from April 30, 2021 to June 1, 2021 in order to provide employers additional time due to significant rate increases for calendar year 2021.

As a recap, here is where Massachusetts employers stand as of this bulletin:

  • Revised 2021 tax rates will be issued by late July and those rate calculations will NOT include COVID-19 related benefits paid between March 10, 2020 and August 1, 2021 from the unemployment insurance solvency rate calculation.
  • The revised 2021 tax rate WILL include a new quarterly COVID-19 recovery assessment for all experience-rated employers.
  • The Quarterly Employment & Wage Detail filings for first and second quarters remain on normal schedule (deadlines of April 30, 2021 & July 30, 2021, respectively).
  • Contribution deadlines for first and second quarters 2021 have been extended and are due no later than August 31, 2021.

As always, we will continue to monitor this situation and provide updates as they become available.  If there are any questions please do not hesitate to contact us or visit our website for the latest news and updates.

 

Aura and Thomas & Company Collaborate to Fight Unemployment Fraud

Original article posted by PR Newswire.

New security alert system stops fraudulent payments before they are made and protects businesses, individuals

BURLINGTON, Mass. and NASHVILLE, Tenn.May 27, 2021 /PRNewswire/ — Aura, a leading provider of digital security solutions for consumers, and Thomas & Company, the nation’s largest privately held unemployment cost management provider, today announced that they have joined efforts to provide companies and their employees with a first-of-its-kind alert system to quickly detect, notify and resolve unemployment fraud. This innovative solution will proactively monitor and alert employers and individuals to new unemployment claims, providing an opportunity to report fraudulent claims and prevent improper payment of benefits, as well as other potential harm resulting from identity theft.

Since the start of the pandemic, criminals have exploited record unemployment rates by using individuals’ stolen personally identifiable information to file fraudulent unemployment claims, and the problem is far from over. According to the Federal Trade Commission1, in the first quarter of 2021, identity theft grew more than 130 percent over the prior year driven by a dramatic increase in government benefits fraud, including unemployment fraud, which grew nearly 4,000 percent. To date, unemployment fraud has cost the U.S. more than $89 billion in improper payments2, according to the U.S. Department of Labor.

“The exponential growth of fraudulent unemployment claims is exacerbating the stress and financial burden that identity theft has on individuals,” said Gerry Baldwin, general manager, employee benefits, Aura. “By protecting individuals from experiencing identity theft—the root cause of this fraud— Aura’s alert system will reduce employees’ risk of financial impact and, through this joint effort, will help employers and employees save time and expenses of fraudulent unemployment claims.”

With Aura Identity Guard integrated into SHIELD, Thomas & Company’s Unemployment Cost Management Platform, individual employees will be alerted in near real-time when their social security number is used to file an unemployment claim. Upon receipt of the alert, the employee can verify whether they initiated the claim or flag the claim if it is fraudulent, empowering Thomas & Company to notify the state workforce agency and prevent improper payments from being disbursed. Further, a dedicated case manager will partner with each employee to ensure resolution of fraudulent claims and relieve employers of this administrative burden.

“We’ve seen first-hand the significant impact unemployment fraud has had on our clients and their employees,” said Jim Thomas, CEO, Thomas & Company. “Teaming with Aura will enable us to continue our decades-long commitment to protecting employee data and reducing administrative burden for employers, while increasing barriers to fraud and assisting state workforce agencies in their own efforts to reduce fraudulent unemployment benefit payments.”

Businesses can learn more about this innovative joint effort and how they can use this service to proactively combat fraudulent unemployment claims by visiting go.identityguard.com/Aura-ThomasCo.html and registering for a webinar with Aura and Thomas & Company, titled Addressing Unemployment Fraud: How to Protect Your Company and Employees, on Tuesday, June 8, 2021 at 11 AM ET.

For more information on Aura’s Employer solutions, visit benefits.aura.com and to learn about unemployment fraud, visit thomas-and-company.com/ui-fraud.

Consumer Sentinel Network Data Book 2020 (March 31, 2021)  
2 DOL-OIG Oversight of The Unemployment Insurance Program (March 31, 2021)

*Original article posted by PR Newswire

Link to full article.