Legislation

House Committee relieves employers of heavy UI burden

by Guy Page

The House Committee on Commerce and Economic Development last week advanced changes to a Senate bill on unemployment insurance. The committee is chaired by Mike Marcotte (R-Coventry, Newport, Irasburg). The changes to S10 passed by a bi-partisan 8-2-1 vote, and are considered highly welcome by the Vermont business community, according to Vermont Chamber Government Affairs Director Charles Martin.

Rep. Mike Marcotte, R-Coventry

The most recent adjustment to S10 removes 2020, an anomaly year, from consideration when the Department of Labor computes unemployment insurance (UI) tax rate schedules. Not making this UI trust fund change would cause the fund to balloon to about twice its pre-pandemic size, which would be an unnecessarily high figure supported by mandatory employer contributions.

Removing 2020 from calculation of the fund will help to hold employers harmless from certain costs related to the pandemic and government-mandated shutdowns, while also ensuring the unemployment trust fund remains solvent and UI claimants are not negatively impacted, Martin said.

“The Vermont Chamber supports the Committee’s change because employers were not responsible for the circumstances that caused the high rate of furloughs in 2020,” Martin said. “Removing 2020 from fund calculations would address this reality while mitigating sharp increases in future mandatory fund contributions by employers that would typically result from regular furloughs.”

S10 passed the Senate despite vociferous opposition from business leaders, who said it would place an unnecessary, heaven burden on employers at a time when many businesses are struggling to stay in business. But the bill passed the Senate anyway. The Marcotte-led House committee is the first body to address the business community’s concerns. The bill now goes to the House Ways & Means Committee, which addresses revenue-related bills. If the changes are approved by the House, the differences between the House and Senate versions will need to be resolved before it is passed into law.

Categories: Legislation

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