House and Senate Republicans File Legislation to Freeze Unemployment Insurance Tax Rate

Massachusetts legislators, including Rep. Vinny deMacedo, R-Plymouth, filed a bill to prevent an automatic 31 percent increase in the amount of money employers pay into the state's unemployment insurance trust fund.

House Minority Leader Bradley H. Jones Jr., R-North Reading, and Senate Minority Leader Bruce E. Tarr, R-Gloucester, co-sponsored the legislation.

According to a release, House and Senate Republicans cite "the current economic climate" as the reason for this legislation. "This would mark the fourth straight year that a similar bill has been passed by the Legislature protecting Massachusetts employers from this damaging and unnecessary tax hike."

Republicans say the increase would amount to $220 per employee, or 31 percent, on the Massachusetts businesses.

According to the Boston Business Journal

Without such a freeze, the average annual cost to businesses would rise to $935 per employee, up from $715 last year. Similar freezes have been enacted in each of the past three years.

The rate hike was effective as of the beginning of the year, but the legislature still has time to approve a freeze because employers don’t have to start paying the tax until the end of the first quarter.

“Implementing this rate freeze is the best and most concrete way we can help to move the Massachusetts economy forward in the New Year,” said Representative Jones. “In these tough fiscal times, we need to remove any impediments to economic growth in the Commonwealth.”

“As a Legislature, our top priority must be to foster a business- friendly environment within the Commonwealth,” Rep. deMacedo said in the statement from his office. “As proposed, the increase would be extremely detrimental to the state’s economy in these difficult economic times.”

“Unemployment insurance is already a major cost for employers in Massachusetts, and one that relates directly to the number of people they employ,” said Senator Tarr. “A substantial rate increase now will not only imperil a struggling economic recovery, it will also put a new obstacle in the way of getting people back to work.”

In addition to freezing the unemployment insurance tax rate hike in the coming weeks, the House and Senate Republican Caucuses will introduce comprehensive unemployment insurance reform and long-term job creation opportunities for the Bay State.