Freezing unemployment insurance rates

Today, the House voted unanimously to stop an increase in the unemployment insurance assessments on employers. There was a strong consensus that we couldn’t shock small businesses with another rate increase.

The text below is verbatim from the Speaker’s official press release on the vote.


“As we struggle to survive in these challenging times, it’s important to ease the burden on businesses, which fund our unemployment system,” House Speaker Robert A. DeLeo said. “This rate freeze signals the House’s commitment to stimulating business and creating jobs in the Commonwealth.”

“In these difficult fiscal times, we must do all that we can to support job growth across our state,” said Representative Brian Dempsey, Chairman of the House Committee on Ways and Means. “This legislation is vital towards facilitating business growth and hiring in Massachusetts.”

“This legislation will help reduce the financial burden on businesses throughout the Commonwealth at a time when many of them are still struggling to emerge from the recession,” said Representative Cheryl Coakley-Rivera, House Chairwoman of the Joint Committee on Labor and Workforce Development. “I applaud the Speaker and my colleagues in the House and Senate for making this bill a priority.”

The Commonwealth’s unemployment insurance system is funded completely from employer contributions. The law governing unemployment insurance requires that, as the fund is depleted, employer contributions increase.

Without this rate freeze, employers would face, on average, a per-employee increase in cost for unemployment insurance of 35% – raising the employer contribution to $872 per employee. Collectively, this would amount to an employer contribution increase of roughly $551 million.

Though the rate freeze will still result in a 10% increase in payments by employers due to other unemployment insurance payment adjustment factors, the freeze will save the average employer $167 per employee.

Published by Will Brownsberger

Will Brownsberger is State Senator from the Second Suffolk and Middlesex District.