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MSA April 2021 Legislative Update

The new 2-year legislative session began in January. A new Speaker was elected, Ron Mariano (D-Weymouth) and Senate President Karen Spilka (D-Framingham) was re-elected to another term. Over 6,000 bills were filed and many impact the staffing industry.

MSA has met with the new Chairman of the Joint Committee on Labor and Workforce Development Rep. Josh Cutler (D-Duxbury) and other members of the committee to express our concerns on several proposals. Hearings will be scheduled over the next few weeks/months. MSA is particularly interested in seeking an exemption from any predictive scheduling proposals as well as insuring that the TWRK requirement will allow staffing to be exempted from notice requirement in draft Wage Theft proposals. MSA is also seeking language limiting liability and providing for a 30-day notice and cure period.

The Baker administration notified Massachusetts employers on April 15th that they now have until June 1 to pay their unemployment insurance tax bills, amid mounting outrage over the unexpectedly high payments due for the first quarter. However, wage reporting data is still due April 30th. Staffing firms have been hit with unemployment insurance tax bills far in excess of what they had been anticipating, especially since lawmakers recently passed legislation put forward by Gov. Baker to freeze a key part of the tax rate to help them recover from the pandemic. But that legislation did not affect something called the solvency assessment, which skyrocketed by nearly 1,600% year-over-year. Though it did authorize DUA Commissioner Jeffers to create a “temporary two-year assessment” to cover the $7 billion borrowing. Estimates say that the “temporary” assessment will cost about $60-$70 per employee per year.

The solvency assessment is set based on state law and will require legislation to fix the crisis. The state needs a comprehensive solution including finding a way to use federal monies and/or reconfigure the rates. Although there might be legislative action to reform the UI system, there should be no expectation that any reform will affect the benefits paid to claimants. Unfortunately, there is no appetite (or political will) with our elected officials to take any action that would otherwise reduce the benefits paid to claimants. Any federal subsidy will only partly offset the deficit in the UI trust funds. The state will most likely cover a portion of the remaining deficit. Employers will be expected to cover the remaining deficit through temporary assessments and higher rates over the next several years.

We all know that the standard UI cost is disproportionate to staffing because of the turnover, but that is not going to change with any solution. We encourage agencies with high turnover to analyze and adjust their clients’ rates accordingly. MSA will continue to advocate for deferment, use of state and federal monies to offset solvency assessment as well as other solutions. MSA continues to meet with members of the legislature to educate them about the industry and staffing’s positive economic impact on the Commonwealth’s economy. We participate in a few fundraisers each quarter. We identify leaders in high-ranking positions who are at the table when policy decisions are being developed. We encourage you to participate in these events. Also, if you would like to have a one-on-one meeting with your local legislator, please contact us and we can help coordinate.