Bill would also reduce business’s UI payments
THE LEADERS OF the Democratic-led Senate and House have reached an agreement on a bill that would provide major financial relief to businesses for the next two years, while also giving workers more generous sick leave and providing tax relief to some unemployed individuals.
“The Senate and House have reached agreement on a bill to help workers and employers jumpstart our nascent recovery as we begin to slowly emerge from the COVID-19 pandemic,” said Senate President Karen Spilka, House Speaker Ron Mariano, Senate Ways and Means chair Michael Rodrigues, and House Ways and Means chair Aaron Michlewitz in a joint statement. “This agreement strikes a balance to ensure that businesses can continue to move forward while protecting those working hard to keep the economy going.”
The bill, which lawmakers pledged to pass “expeditiously,” would constitute a significant COVID relief package for businesses and employers, if Gov. Charlie Baker signs it into law. Lawmakers have not said when they will vote on the bill and if they will first accept public testimony. The House is scheduled to meet in a formal session on Thursday. The Senate has only an informal session scheduled that day.
As of Monday afternoon, lawmakers had not released a copy of the bill, but only a statement of intent, so details of the proposals were unavailable.
Lawmakers released the statement as time was running out to address some major costs that were about to hit businesses, which are still struggling due to COVID-19-related restrictions.
The bill includes a provision exempting from state taxes money that small businesses receive from the federal Paycheck Protection Program. Business tax payments are due March 15.
It also includes a provision preventing huge rate increases for businesses paying into the unemployment insurance system this year, for which the first payments are due March 31. Under state law, business pay into the unemployment insurance system at a rate that changes based on how much money is in the unemployment insurance trust fund. (The formula also requires businesses to pay more if they have a history of laying off employees.) Last year, high unemployment and generous benefits due to COVID-19 and the related shutdowns drained the unemployment insurance fund. So the rate businesses would have to pay was scheduled to skyrocket.
The bill would freeze the rate schedule for 2021 and 2022, preventing the hefty increase. The state would be authorized to borrow money to keep the unemployment insurance trust fund solvent. That borrowing would be repaid over time by a tax on employers, but employers could pay for it over many years rather than through a sudden rate hike the next two years.
Baker had initially proposed a two-year rate freeze, and businesses were lobbying lawmakers to adopt his proposal. According to the Baker administration, the average per employee cost for businesses would rise from $539 this year to $635 next year under his bill, instead of the $866 that is anticipated without any changes. Baker estimated that businesses would save $1.3 billion in unemployment insurance costs over the next two years under his bill. It is not yet clear whether the legislative bill is identical to Baker’s.
The bill would also offer additional protections for workers by ensuring that all employees have access to paid leave if they are unable to work because they get infected with the coronavirus, are ordered to quarantine, or need to take time off to get the vaccine. The state would reimburse companies for the costs of providing paid leave. The details – such as how many days would be available, under what circumstances, who would be eligible, how the state reimbursements would work, and how much it would cost – were not provided in the brief statement.
“We believe this will provide a necessary and crucial safety net for the employees, especially essential workers, who have shown up every day to keep our economy and communities running throughout this public health crisis,” the legislative leaders said in their statement.
Massachusetts already mandates that businesses provide paid sick leave. But a coalition of workers’ rights groups has been pushing for the adoption of a more generous sick leave policy during the COVID-19 pandemic, arguing that existing protections are inadequate. A federal law giving pandemic-related paid sick leave to most employees (excluding those at very large companies and those working in health care or residential care facilities) expired at the end of 2020. Massachusetts’s paid sick leave law provides five days of sick leave to employees who accrue it. But if a person used up their five days in 2020 and needs time off in early 2021, they might not have enough time accrued. The state’s new paid family and medical leave law has a one-week waiting period before someone can begin getting paid.
“As we move into this next phase of the pandemic and start to reopen more businesses, it’s going to be really important that in addition to vaccines and mask wearing, emergency paid sick time gives workers the ability to stay home if they may be sick and can avoid spreading the disease,” said Andrew Farnitano, a spokesperson for the Raise Up Coalition, a coalition of labor unions, clergy, and liberal organizing groups.
Deb Fastino, executive director of the Coalition for Social Justice, said in a statement, “Emergency paid sick time will help slow the spread of highly transmissible COVID-19 variants, save lives, and reduce the social and economic costs of the pandemic by allowing us to reopen more businesses safely.”
The bill would also offer “targeted tax relief” to unemployed workers whose income falls below 200 percent of the poverty line. The specifics of that were not immediately available. It would also waive penalties for missed tax payments on unemployment benefits received in 2020, which lawmakers say is a recognition of the fact that many people are getting unemployment benefits for the first time.