Monday, March 01, 2010
Maryland Chamber Supports Amended Unemployment Insurance Bill
The Maryland Chamber of Commerce announced today that it will support the unemployment insurance compromise developed by the Senate Finance Committee, with the help of the Unemployment Insurance Oversight Committee.
“We thank the Senate Finance Committee, the Unemployment Insurance Oversight Committee and representatives from the administration for working to address our concerns,” Maryland Chamber President/CEO Kathy Snyder, CCE said. “Our goals have been to give employers payment plan options, offset the cost of any unemployment insurance system changes and ensure the long-term health and stability of the unemployment insurance trust fund. This bill accomplishes those goals.”
The Chamber strongly supports the payment plans and reduced interest rates included in the bill. The payment plans will help Maryland employers spread the cost of increased unemployment insurance taxes over the course of the year. Unemployment insurance taxes are calculated based on the first $8,500 of taxable wages. Without this option, the weight of the unemployment insurance tax increase will hit many businesses especially hard in the first quarter.
As introduced, the bill would increase benefits and eligibility in order to make the state eligible for $126.8 million of federal stimulus funds. The long-term cost of the proposed changes is estimated at $18.4 million to $19.4 million per year. The changes include:
- Adopting an Alternative Base Period, adjusting how the state determines a claimant’s monetary eligibility and employer charges.
- Providing 26 additional weeks of UI benefits to people enrolled in job training.
- Making adjustments to the existing law allowing benefits for part-time workers.
The amended bill includes $18.2 million to $19.5 million in annual reductions to offset the cost of the benefit increases needed to make the state eligible for the federal stimulus funds. Offsets include:
- Elimination of sick claims.
- Increasing the minimum weekly benefit.
- Increasing penalties for misconduct and gross misconduct.
- Decreasing disregarded wages.
The amended bill also keeps the tax tables at table F, rather than moving to table E. This will help the state build up the unemployment insurance trust fund faster. The original bill used much of the federal stimulus funds to provide employers with a small one-year rate deferral. While deferring a small portion of the unemployment insurance tax increase may sound appealing, the Chamber believes it would weaken the unemployment insurance system and ensure that Maryland employers pay higher rates for a longer period of time. By dedicating the federal funds to the trust fund, and remaining at Table F, the amended bill takes the first step towards rebuilding the trust fund and reducing unemployment insurance tax rates for all Maryland employers.
