Bay State News

Massachusetts is facing significant challenges relating to unemployment insurance (UI), according to findings from the state auditor and responses from advocacy groups. Several aspects are contributing to this issue.

The state auditor's office, led by Diana DiZoglio, conducted an investigation into the Department of Unemployment Assistance (DUA), examining the period from March 12, 2020, to December 31, 2021. The audit report highlighted several issues: “DUA incorrectly paid Pandemic Unemployment Assistance (PUA) on behalf of individuals while they were incarcerated. DUA incorrectly paid PUA benefits on behalf of then-current Commonwealth of Massachusetts employees who were not eligible to receive these benefits. DUA did not report the overpayments to the United States Department of Labor Office of the Inspector General for further investigation.” Furthermore, it was reported that “The Executive Office of Labor and Workforce Development did not submit all Unemployment Insurance Trust Fund reports or ensure that they were submitted by required due dates."

These problems have raised concerns among local businesses, as Massachusetts employers may face increasing taxes and additional burdens. The state already ranks poorly in the nation for UI taxes and has lax eligibility requirements. Employers are dealing with the highest weekly maximum UI benefit in the US, a repayment of $2.7 billion in COVID assessments, and a potential increase in the tax rate schedule from C to D starting January 1, 2025. Additionally, a federal decision looms regarding whether the $2.5 billion accounting error by the state will financially impact employers.

In response, the National Federation of Independent Business (NFIB) has called for legislative reform. NFIB stated, “We urge you to take a moment to remind policymakers, through NFIB’s action alert, that you are aware of this issue and monitoring how they are managing this growing crisis.” The organization is advocating that lawmakers address the state's UI system's deficiencies without placing the financial responsibility of the state's error onto Massachusetts businesses.