MINNESOTA – BILL INTRODUCED PROVIDING UNEMPLOYMENT BENEFITS TO STRIKING WORKERS
The Bill: A bill that would provide striking workers unemployment benefits in Minnesota has been introduced and referred to the House Workforce, Labor, and Economic Development Finance and Policy Committee. The bill would remove all disqualifying language from current legislation and would add qualifying language for any individuals who have stopped working because of a labor dispute as long as they are not considered to have quit or have been on a leave of absence or suspended at the time the labor dispute began.
If passed, Minnesota would join New Jersey and New York as the only states to provide benefits to striking workers.
For Your Consideration: State unemployment benefits are intended to be paid to individuals who are out of work through no fault of their own. These benefits are paid from a State Trust Fund which all Minnesota employers fund through state unemployment tax paid on the first $43,000 of wages paid to the employee during the tax year. Benefits that are paid out are often charged against multiple employers’ experience accounts or to the “general Trust Fund” (hitting all employers). The solvency of the Trust Fund in the State of Minnesota is considered inadequate. According to the March 2024 Dept. of Labor’s Trust Fund Solvency report, the AHCM was 0.51%. In order to be considered adequately funded, this measurement would be 1.0%.
To an attempt to replenish the solvency of this fund, Minnesota employers saw an estimated 26% increase, on average, in their 2025 state unemployment taxes for every employee earning the full wage base of $43,000. This was a result of a higher base tax rate (0.10% to 0.40%) and table, a higher taxable wage base (from $42,000 to $43,000), and a 5% tax assessment on the state unemployment tax paid for the year. For these reasons alone, it might warrant hesitation on creating new legislation to pay out even more benefits from the fund for striking workers. The impact of such legislation could easily spread to all employers and not just the employer involved in the labor dispute.
NORTH CAROLINA – AMENDMENT TO PROPOSED BILL WOULD PROVIDE EMPLOYERS TAX RELIEF
The Bill: A proposed bill that has moved to the North Carolina Senate after passing in the House would provide employers who paid taxable wages in the fourth quarter of 2024 (4Q24) with a tax credit that would be equal to the amount of UI tax payments made on or before January 31, 2025. The tax credit due would be applied towards the employer’s UI tax payment due on April 30, 2025 with any credit exceeding the employer’s liability being refunded to the employer.
For Your Consideration: According to the legislature’s Fiscal Review Division, this tax credit would reduce employer payments by approximately $100 million. Despite the reduced tax revenue, the state’s Unemployment Trust Fund is expected to remain strong and solvent.
Continued Monitoring: Thomas & Company will continue to monitor this bill for additional details on who qualifies for the credit and what actions employers need to take, if any.
US CONGRESS – SENATORS INTRODUCE HERO FOR YOUTH ACT AIMING TO EXPAND WOTC CREDITS AVAILABLE FOR YOUTH TARGETED HIRING AND EMPLOYMENT
The Bill: Senators Dick Durbin and Tammy Duckworth have introduced new legislation, the Helping to Encourage Real Opportunities (HERO) for Youth Act. The proposal would expand the Work Opportunity Tax Program to include youth ages 16-24 who are both out of school and out of work and youth ages 16-21 that are currently in foster care or have aged out of the system.
The legislation would also double the eligible credit amount to $2,400 for you and expand the Summer Youth Program to include year-round employment, limiting the number of hours eligible youth can work while in school to no more than 20 hours per week.
For Your Consideration: The expansion of WOTC credits for youth employment would provide employers with a significant financial incentive to hire and support at-risk youth, helping them to gain valuable work experience and increase their chances of future success.
Thomas & Company will continue to monitor all legislation as it makes its way through the legislative process.
