Unemployment insurance in Massachusetts
Unemployment insurance in Massachusetts
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Unemployment insurance is a term that refers to a joint federal and state program that provides temporary monetary benefits to eligible laid-off workers who are actively seeking new employment. Qualifying individuals receive unemployment compensation as a percentage of their lost wages in the form of weekly cash benefits while they search for new employment.
The federal government oversees the general administration of state unemployment insurance programs. The states control the specific features of their unemployment insurance programs, such as eligibility requirements and length of benefits.
Although the word insurance is in the term, a few key differences distinguish unemployment insurance from private insurance plans such as home insurance, car insurance, or health insurance. In most states, employers—rather than individuals themselves—pay unemployment taxes that fund state unemployment insurance programs. When an individual loses their employment (and meets eligibility requirements), state-administered unemployment insurance programs provide temporary monetary benefits to the former employee. Unemployment insurance compensation is not intended to replace lost wages; it is designed to replace a portion of the individual's lost wages with the goal of providing financial support as an individual searches for a new job.
This page provides information about the unemployment insurance program in Massachusetts .
Background
See also: Unemployment insuranceThe joint federal-state unemployment insurance program provides temporary monetary payments to individuals who have lost employment through no fault of their own. Laid-off workers must actively seek new employment in order to receive unemployment benefits.
The unemployment insurance program was established in 1935 through the Social Security Act (SSA). Congress at the time aimed to develop a means to help mitigate the effects of widespread job losses that had occurred during the Great Depression. Due to concern that the U.S. Supreme Court would find a national unemployment insurance program unconstitutional, Congress designed a federal payroll tax mechanism that incentivized states to set up their own unemployment insurance programs under the direction of broad federal guidelines. According to the program, states deposit unemployment insurance tax funds into the Federal Unemployment Trust Fund, which the federal government then credits to state accounts to pay unemployment benefits. [1] [4]
The federal government operates as a general overseer of state unemployment insurance programs in order to ensure proper program administration. States retain control over their specific programs and can determine state-specific conditions, such as eligibility requirements, benefit amounts, and duration of benefits. States with unemployment insurance programs that meet federal standards are eligible for federal grants to assist with administrative costs. [2] [4]
The Massachusetts unemployment insurance program is administered by the Massachusetts Department of Unemployment Assistance.
Timeline of unemployment insurance program in Massachusetts
The following timeline features selected key events in the history of Massachusetts' unemployment insurance program. The timeline is not a comprehensive history of the state unemployment insurance program.
1938 : As of May 1, 1938, Massachusetts' unemployment insurance program offered a maximum weekly benefit amount (WBA) of $15 for up to 28.8 weeks. [5] 1985 : As of January 1, 1985, Massachusetts' unemployment insurance program offered a maximum WBA of $196 for up to 30 weeks. [5] 2021 : A March 2021 report from the U.S. Department of Labor found that the trust funds in 40 states and territories, including Massachusetts, had dropped below the recommended minimum solvency standard as of January 1, 2021. [6] 2022 : The Massachusetts Department of Unemployment Assistance announced February 23 that it would suspend the use of facial recognition technology through ID.me as a way for unemployment insurance claimants to verify their identities. The department cited declining numbers of fraud cases and decreased claim volumes as the basis for the decision. The change still allowed claimants to verify their identities virtually through a live video chat with an ID.me representative. [7] 2022 : Executive Office of Labor and Workplace Development Secretary Rosalin Acosta announced March 25 that the state intended to issue between $2 billion and $3 billion of bonds to help replenish the state's unemployment trust fund after borrowing from the federal government increased during the coronavirus pandemic. [8] 2022 : A March 2022 report from the U.S. Department of Labor found that Massachusetts had an AHCM value of 0.00. [9]
Funding
See also: Unemployment taxes , Federal Unemployment Tax , State unemployment taxThe unemployment insurance program is funded by state and federal taxes on employers, or unemployment taxes .
While state tax amounts vary, the Federal Unemployment Tax Act (FUTA) tax is 6% of the first $7,000 of an employee's wages. Employers can receive an offset of up to 5.4% of their FUTA tax when they pay state unemployment taxes on time. An employer that receives the full 5.4% FUTA credit, therefore, pays 0.6% of the first $7,000 of an employee's wages, or $42, in FUTA tax per qualifying employee. [10] [2]
New employers begin paying into the unemployment insurance system at the new employer rate. Depending on state laws, employers that have paid unemployment insurance taxes for a set time period (usually a few years) receive an experience rating . The more unemployment claims an employer has, the higher their tax rate. [2]
States that exhaust their unemployment insurance program reserves can borrow from the federal Treasury through the Title XII program. States must repay their unemployment insurance program debts within two to three years or the federal taxes on employers in the state automatically increase until the debt is paid. In states that are overdue in repaying unemployment insurance debt to the federal Treasury, the FUTA tax offset is reduced. [10] [2]
Benefits
Massachusetts Department of Unemployment Assistance instituted changes to the state's unemployment insurance program during the coronavirus (COVID-19) pandemic.
The standard term of unemployment benefits is 26 weeks, but specific terms vary by state. For example, Arkansas paid 16 weeks of benefits as of 2022. Massachusetts, on the other hand, paid 30 weeks of benefits and Montana paid 28 weeks of benefits. [10] [11]
The following sections provide information about specific benefits available through Massachusetts' unemployment insurance program.
Length and amount of standard benefits
The Massachusetts' unemployment insurance program provided up to 30 weeks of benefits as of February 2023. Benefit amounts ranged from a minimum of $98 a week to a maximum of $1015 a week. [12] [13] [14]
Extended benefits
During periods of high unemployment, extended benefits up to 13 weeks, depending on the state, are available to workers who have otherwise exhausted their unemployment insurance benefits. Extended benefits up to 20 weeks may also be available in some states during periods of extremely high unemployment. [15]
The Massachusetts unemployment insurance program did not provide extended benefits as of February 2023. [13]
Eligibility requirements
Massachusetts Department of Unemployment Assistance instituted changes to the state's unemployment insurance program during the coronavirus (COVID-19) pandemic. Click here for more information.
The following sections provide general information about unemployment insurance program eligibility as well as specific eligibility information for Massachusetts' unemployment insurance program.
Background
Eligibility criteria for unemployment insurance recipients vary by state. In general, recipients must have lost employment through no fault of their own. The unemployment insurance program does not cover individuals who voluntarily leave their positions, who are fired for just cause, or who are seeking to reenter the workforce after a voluntary exit. Nor do unemployment insurance programs generally cover first-time job seekers, students, self-employed individuals, gig workers, or undocumented workers. [1] [10]
States also require that recipients meet certain work and wage thresholds. Unemployed workers in most states must have worked for a minimum amount of time or must have received a minimum amount of earnings from their employer (between $1,000 to $5,000 in 2019) in order to be eligible to receive benefits. [10]
States generally require individuals to perform the following tasks in order to maintain weekly eligibility, according to the U.S. Department of Labor:
“ File weekly or biweekly claims, usually by mail or phone. Be able to work, available to work, and actively seek work each week you claim benefits. Report any earnings from work you had during the week(s). States have different rules for how much money you can earn while receiving benefits. Report any job offers or job offers you decline during the week. If requested, report to your local UI claims office or American Job Center on the scheduled day and time. Benefits may be denied for those who do not attend. Some states require registration for work with the State Employment Service, so it can assist you in finding employment. Meet any other state eligibility requirements. [16] [17] ”Recipients must report their unemployment insurance benefits as part of their gross income on their tax returns. [18]
Massachusetts eligibility requirements
Unemployment insurance recipients in Massachusetts must meet the following criteria in order to qualify for benefits: [19]
Recipients must have lost employment through no fault of their own. Recipients must have earned at least $5,400 during the base period. Recipients must be unemployed or partially employed and earning less than their weekly unemployment insurance benefits. Recipients must be able and available to work.Unemployment insurance program solvency
The following sections provide general information about unemployment insurance program solvency as well as specific information about the solvency of Massachusetts' unemployment insurance program.
Background
Federal unemployment insurance program guidelines recommend that states hold at least one year of projected benefit payments in reserves. States base the year of projected benefit payments on the highest level of unemployment insurance payments experienced during the last 20 years. [20]
States determine their program solvency by using the Average High Cost Multiple (AHCM)—the ratio of the state's trust fund balance to the average of its three highest years of unemployment insurance payments. States with an AHCM below 1.0 risk insolvency. [20]
As of a January 2023 report, 16 states had trust funds operating at or above the minimum solvency standard. Four states had trust funds with the lowest (least solvent) AHCM value of 0.00. [21]
The map below identifies AHCM values by state as of January 2023. States shaded green have AHCM values above 1.0, while red states have AHCM values of 0.00. Gray states have AHCM values above 0.00 but below 1.0. [21]
The following table identifies AHCM values by state as of January 2023. Green rows indicate states with AHCM values above 1.0. Red rows indicate states with AHCM values of 0.00. [21]
AHCM values by state, January 2023 State AHCM value Alabama 0.99 Alaska 1.96 Arizona 0.85 Arkansas 1.13 California 0.00 Colorado 0.01 Connecticut 0.00 Delaware 1.29 Florida 0.44 Georgia 0.39 Hawaii 0.21 Idaho 1.44 Illinois 0.00 Indiana 0.61 Iowa 1.32 Kansas 1.39 Kentucky 0.44 Louisiana 0.68 Maine 1.73 Maryland 0.92 Massachusetts 0.72 Michigan 0.33 Minnesota 0.63 Mississippi 1.21 Missouri 0.54 Montana 1.38 Nebraska 1.45 Nevada 0.37 New Hampshire 0.91 New Jersey 0.09 New Mexico 0.62 New York 0.00 North Carolina 0.98 North Dakota 1.02 Ohio 0.32 Oklahoma 0.44 Oregon 1.99 Pennsylvania 0.04 Rhode Island 0.65 South Carolina 1.05 South Dakota 1.77 Tennessee 0.71 Texas 0.22 Utah 1.13 Vermont 0.83 Virginia 0.82 Washington 0.60 Washington, D.C. 0.38 West Virginia 0.81 Wisconsin 0.55 Wyoming 2.18
Unemployment insurance program solvency in Massachusetts
Massachusetts had an AHCM value of 0.72 as of January 2023. [6]
Unemployment insurance expansion during the coronavirus (COVID-19) pandemic
See also: Federal government responses to the coronavirus (COVID-19) pandemic, 2020-2021The federal government expanded unemployment insurance benefits during the coronavirus (COVID-19) pandemic in order to provide financial support to affected individuals and businesses.
Coronavirus Aid Relief and Economic Security (CARES) Act
The U.S. House of Representatives on March 27, 2020, passed the Coronavirus Aid Relief and Economic Security (CARES) Act to provide financial relief to individuals and businesses impacted by the coronavirus pandemic. [22] President Donald Trump (R) signed the legislation on March 27. [23] Among the provisions in the act, Congress earmarked roughly $260 billion to expand unemployment insurance benefits across the country. [24] The act supplemented state unemployment insurance payments by increasing the number of weeks an individual could receive benefits and by providing individuals with an additional $600 per week on top of what they would normally receive. [25]
American Rescue Plan
The American Rescue Plan, signed by President Joe Biden (D) on March 11, 2021, extended federal unemployment insurance programs related to the coronavirus (COVID-19) pandemic, including the federal government's $300 per week add-on to state unemployment benefits, through September 6, 2021. [26] The legislation also extended unemployment benefits for self-employed and gig workers, extended benefits for unemployed mixed earners (people who earned money through employment and self-employment), and extended the number of weeks individuals could receive unemployment.
Supplemental unemployment insurance benefits during the coronavirus (COVID-19) pandemic
The CARES Act and the American Rescue Plan established the following supplemental unemployment insurance programs during the coronavirus (COVID-19) pandemic:
Federal Pandemic Unemployment Compensation (FPUC)The Federal Pandemic Unemployment Compensation (FPUC) program aimed to provide qualifying unemployment insurance claimants with a supplemental $300-$600 per week in addition to their state unemployment insurance benefits. The program expired on September 6, 2021. [27]
Pandemic Emergency Unemployment Compensation (PEUC)The Pandemic Emergency Unemployment Compensation (PEUC) sought to provide 24 weeks of extended unemployment insurance benefits to recipients who have exhausted their standard benefits. The program expired on September 6, 2021. [27] [28]
Pandemic Unemployment Assistance (PUA)The federal Pandemic Unemployment Assistance (PUA) program aimed to provide individuals who are out of work but ineligible for standard unemployment insurance benefits with $300-$600 in weekly compensation. Qualifying individuals included workers who are not eligible for standard benefits, such as independent contractors and self-employed workers, as well as individuals who have exhausted their standard benefits, extended benefits, or PEUC benefits. The program expired on September 6, 2021. [28]
Lost Wages Assistance (LWA)The Lost Wages Assistance (LWA) program aimed to provide individuals receiving at least $100 per week in standard unemployment insurance benefits, PEUC benefits, or PUA benefits with an additional $300 per week. The federal government paid $300 per week in LWA benefits to qualifying individuals while state governments contributed $100 per week, either in the form of standard or supplemental benefits. The program aimed to provide benefits from August 1, 2020, to December 27, 2020, but funding was depleted by September 5, 2020. [29] [28]
Mixed Earners Unemployment Compensation (MEUC)The federal Mixed Earners Unemployment Compensation (MEUC) program sought to provide an additional $100 per week to individuals receiving unemployment insurance benefits who earned at least $5,000 through self-employment in the tax year prior to their claim. Claimants receiving PUA benefits were ineligible for MEUC benefits. The program expired on September 6, 2021. [30]
Supplemental unemployment insurance benefits in Massachusetts during the coronavirus (COVID-19) pandemic
Eligible Massachusetts residents could qualify for the following supplemental unemployment insurance benefits made available during the coronavirus (COVID-19) pandemic:
Supplemental unemployment insurance program benefits in Massachusetts during the coronavirus (COVID-19) pandemic Program Benefits Federal Pandemic Unemployment Compensation (FPUC) *$600 per week (weeks ending April 4 through July 31, 2020)*$300 per week (weeks ending January 2 - September 6, 2021) Pandemic Emergency Unemployment Compensation (PEUC) *$600 per week (weeks ending April 4 - July 25, 2020)
*$300 per week (weeks ending January 2 - September 6, 2021) Pandemic Unemployment Assistance (PUA) *$600 per week (weeks ending April 4 through July 31, 2020)
*$300 per week (weeks ending January 2 - September 6, 2021) Lost Wages Assistance (LWA) *$300 per week if an individual's standard or PEUC benefits totaled at least $100 per week Mixed Earners Unemployment Compensation (MEUC) *$100 per week (weeks ending January 2 - September 6, 2021)
Noteworthy events
Massachusetts announces plan to waive up to $1.6 billion in non-fraudulent unemployment insurance overpayments (2022)
Massachusetts Governor Charlie Baker's (R) administration announced on April 14 a plan to waive $1.6 billion in non-fraudulent unemployment insurance overpayment collections. The plan offered waivers for some workers who claimed benefits during the pandemic but were asked to repay them because the state deemed them ineligible after the payment of benefits.
The administration wrote off $475 million in overpaid benefits related to insufficient identity verification. The state said many of those overpayments involved cases of identity theft where affected claimants never received benefits.
The US Department of Labor (USDOL) also granted a partial blanket waiver for all Federal Pandemic Unemployment Assistance (PUA) overpayments related to insufficient proof-of-work between the weeks ending January 2 and March 20, 2021.
The state was also planning to file emergency regulations to issue waivers for up to $782 million additional non-fraudulent state unemployment insurance and federal PUA overpayments not covered under the USDOL waiver. The state did not release details on who would qualify for forgiveness under the emergency regulations. [31]
Massachusetts officials announce $2.6 billion bond sale to replenish the state's unemployment insurance trust fund (2022)
Massachusetts Governor Charlie Baker's (R) administration announced on April 15 that the state intended to issue $2.6 billion of bonds to help replenish the state's unemployment trust fund and pay back $1.77 billion of federal loans to the fund. The state legislature in 2021 approved bond sales to help fund the unemployment trust fund.
The state's unemployment trust contained $2.64 billion according to a report released April 15. Subtracting the federal loans and $372 million in employer credits from the balance brought the account total to under $500 million. The state estimated the trust fund would grow to about $3.32 billion at the end of 2022 with the bond sales. The state expected to sell the bonds by the end of September 2022. [32]
See also
Unemployment insurance Unemployment insurance fraud in Massachusetts History of unemployment insurance fraud in MassachusettsFootnotes
↑ 1.0 1.1 1.2 The Wall Street Journal , "How Does Unemployment Work?" February 22, 2021 ↑ 2.0 2.1 2.2 2.3 2.4 2.5 Employment Law Firms , "How Unemployment Works," accessed May 18, 2021 ↑ Foundation for Government Accountability , "What is 'Unemployment Insurance?'" December 30, 2020 ↑ 4.0 4.1 Social Security Administration , "Unemployment Insurance, Then and Now 1935-1985," accessed May 19, 2021 ↑ 5.0 5.1 Social Security Administration , "Unemployment Insurance, Then and Now, 1935–85," October 1985 ↑ 6.0 6.1 U.S. Department of Labor , "STATE UNEMPLOYMENT INSURANCE TRUST FUND SOLVENCY REPORT 2021," March 2021 ↑ Boston Globe , "State unemployment agency will stop using face recognition to check identities," accessed February 28, 2023 ↑ Boston Globe , "Mass. plans bond sale of $2 billion to $3 billion to bolster unemployment trust fund," accessed February 28, 2023 ↑ U.S. Department of Labor , "Regular Benefits Information by State for CYQ - 2022.3," March 2022 ↑ 10.0 10.1 10.2 10.3 10.4 Brookings , "How does unemployment insurance work? And how is it changing during the coronavirus pandemic?" July 20, 2020 ↑ Forbes , "The States With The Best And Worst Unemployment Benefits—And Why They’re So Different," March 17, 2021 ↑ Massachusetts Department of Unemployment Insurance , "Unemployment Insurance (UI) eligibility and benefit amounts," accessed February 28, 2023 ↑ 13.0 13.1 Center on Budget and Policy Priorities , "Policy Basics: How Many Weeks of Unemployment Compensation Are Available?" accessed February 28, 2023 ↑ "How your unemployment benefits are determined," accessed February 28, 2023 ↑ United States Department of Labor , "Unemployment Insurance Extended Benefits," accessed May 19, 2021 ↑ United States Department of Labor , "Unemployment Insurance Fact Sheet," accessed May 18, 2021 ↑ Note: This text is quoted verbatim from the original source. Any inconsistencies are attributable to the original source. ↑ Internal Revenue Service , "Topic No. 418 Unemployment Compensation," accessed May 18, 2021 ↑ Massachusetts Department of Unemployment Assistance , "Check eligibility for unemployment benefits," accessed February 28, 2023 ↑ 20.0 20.1 Cite error: Invalid ref tag; no text was provided for refs named merc ↑ 21.0 21.1 21.2 U.S. Department of Labor , "State Unemployment Insurance Trust Fund Solvency Report 2023," March 2023 ↑ The Hill , "House passes $2 trillion coronavirus relief bill, with Trump to sign quickly," March 27, 2020 ↑ The Hill , "Trump signs $2T coronavirus relief package," March 27, 2020 ↑ NPR , "What's Inside The Senate's $2 Trillion Coronavirus Aid Package," March 26, 2020 ↑ The National Law Review , "CARES Act Expands Unemployment Insurance Benefits," April 5, 2020 ↑ Forbes , "New Stimulus Package: Unemployment Benefits, $300 Per Week Extended Until September," accessed May 11, 2021 ↑ 27.0 27.1 Investopedia , "Federal Pandemic Unemployment Compensation (FPUC) and How to Apply," June 20, 2021 ↑ 28.0 28.1 28.2 Florida Department of Economic Opportunity , "Florida Reemployment Assistance Benefit Programs," accessed July 28, 2021 ↑ Investopedia , "Lost Wages Assistance (LWA) Program," June 23, 2021 ↑ Florida Department of Economic Opportunity , "Important information and updates," accessed July 29, 2021 ↑ Massachusetts Office of the Governor , "Baker-Polito Administration Announces Unemployment Overpayment Relief Plans," accessed February 28, 2023 ↑ The Boston Globe , "State plans $2.6 billion bond sale to bolster unemployment insurance trust fund," accessed February 28, 2023 v • e Unemployment insurance Terms Unemployment insurance • Unemployment insurance fraud • Unemployment insurance fraud recovery • Employment taxes • Federal Unemployment Tax • Unemployment Trust Fund • State Unemployment Trust Funds • Indexing unemployment benefits • Experience rating • Refusal of work • Integrity Data Hub • Unemployment extension • Work search activity Unemployment insurance programs in the states Unemployment insurance programs in the states • Unemployment insurance fraud in the states • History of unemployment insurance fraud in the states Reform proposals Reform proposals related to unemployment insurance • Unemployment insurance reform activity in the states v • e Ballotpedia About Overview • What people are saying • Support Ballotpedia • Contact • Contribute • Job opportunities Executive: Leslie Graves, President • Gwen Beattie, Chief Operating Officer • Ken Carbullido, Vice President of Election Product and Technology Strategy • Michelle Robinson, Senior Product Manager, Education & School Boards
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