Massachusetts Unemployment Insurance

A Federal-State Program
Edward Malmborg
Director Division of Unemployment Assistance

1. Massachusetts
Unemployment
Insurance
A Federal-State Program
Edward Malmborg
Director Division of
Unemployment Assistance

2. Federal – State Unemployment
Insurance Program
The UI system was established in 1935 as
a joint Federal – State Program
Purpose – To pay benefits for periods of
involuntary unemployment, to stabilize
employment, and to provide public
employment offices to assist UI claimants
in finding jobs.

3. Federal Unemployment Tax Act
(FUTA)
Established a federal payroll tax on
employers.
Primarily a tax act, includes coverage, and
definitions of wages, employers,
employment.
Also defined unemployment
“compensation” & implemented the basic
philosophy of the program.

4. FUTA Payroll Tax
Implemented to defray cost of administration of
UI program.
Also provides federal funding of extended
benefits, and loans to states with insolvent UI
trust funds.
Provides for a 6.2% tax rate on a per worker
wage base of $7,000
Provides credits of a maximum of 5.4% if state
law conforms with federal standards, the
employer certified compliant with UI filings and
payment of contributions to State Trust Fund.

5. Massachusetts UI - Benefits
All claims based on services performed in a base period
(BP), Mass primary BP last four completed calendar
quarters, all other states BP is first four of last five
completed quarters.
Mass and 14 other states also have an alternate BP,
optionally used if it will raise total benefits by 10%.
Alternate BP = weeks since end of last quarter plus
previous 3 quarters.
Earnings requirement minimum of $3500 in BP and 30
times WBA.
Weekly benefit amount (WBA) equals ½ of calculated
average weekly wage. AWW = amount earned in highest
2 quarters/26 weeks. Current maximum $628.
Dependency allowance adds $25 per dependent child
under 18, or 24 if a full time student.

6. Massachusetts Benefits (cont)
Maximum total benefits = lesser of 36% of BP earnings
or 30 times WBA – so maximum duration = 30 weeks.
Except during a period of federally funded extended
benefits = 26 weeks.
Massachusetts provides for a person attending approved
training an additional 18 weeks of benefits, if they
applied for training approval in the first 15 weeks.
Disqualification:
Discharge for deliberate misconduct or company rule violation.
Voluntary quit , except for good cause attributable to employer or
for an urgent or compelling reason such as family illness,
domestic violence, etc.
Receipt of Separation pay except in connection with a plant
closing or if required to sign release of claims against employer
Not available for and able to work in normal occupation.

7. Benefit Extensions
Current benefit extensions
Emergency Unemployment Compensation 2008 (EUC08)
Began July 6, 2008 – up to 13 additional weeks
Modified November 21, 2008 to up to 20 weeks
Mass. Triggered to a “high unemployment state” 6%+ TUR, added
a second Tier of EUC08 an additional 13 weeks.
Requires base period earnings of 40 times WBA or 1-1/2 times
earnings in the highest calendar quarter and no eligibility for any
state or federal UI.
EUC08 will end December 31, 2009.
Extended Benefits (EB) Federal-State Extended Unemployment
Compensation Act 1970
Mass. Triggered onto EB effective May 16, 2009 when the state IUR
reached a 13 week average of 5% or more.
Remains in effect in Mass. As long as the13 week average IUR
exceeds 5%.
Potential duration of up to 13 weeks, but one criteria of duration is
39 weeks minus number of weeks of UI paid on UI claim.
Base period earnings requirements same as EUC08.
Benefit costs normally shared 50-50, state-federal.

8. Massachusetts Revenue
Two types of employer financing:
Private Contributory & Reimbursable
Accounts maintained on approx. 187,000 Massachusetts
Private Contributory employers.
Credits to accounts are contributions paid quarterly.
Debits are benefits paid that the employer is responsible
for, along with an annual solvency assessment.
Annual account balance is calculated each year after
Sept. 30th. It may be a positive or negative balance.
Reserve Percentage - Employer account balance is
divided by total taxable wages paid based on a $14,000
per worker wage base.
Reserve Percentage for State UI Trust Fund is also
calculated = Sept. 30 Trust Fund Balance/Total Payroll
of private contributory employers.

9. A B C D E F G
State Trust Fund
Reserve Percentage

1.75% and
over
1.6%
but less
than 1.75%
1.4%
but less
than 1.6%
1.1%
but less
than 1.4%
0.8%
but less
than 1.1%
0.5%
but less
than 0.8%
less
than 0.5%
Employer Reserve
Percentages
Negative Percentages
15 or more 7.80 8.74 9.78 10.96 12.27 13.75 15.40
13.0 but less than 15.0 7.40 8.29 9.28 10.40 11.64 13.04 14.61
11.0 but less than 13.0 7.00 7.84 8.78 9.83 11.01 12.34 13.82
1.0 but less than 3.0 5.00 5.60 6.27 7.02 7.87 8.81 9.87
0.0 but less than 1.0 4.60 5.15 5.77 6.46 7.24 8.11 9.08
Employer Reserve
Percentages
Positive Percentages
0.0 but less than 0.5 3.90 4.37 4.89 5.48 6.14 6.87 7.70
0.5 but less than 1.0 3.80 4.26 4.77 5.34 5.98 6.70 7.50
1.0 but less than 1.5 3.70 4.14 4.64 5.20 5.82 6.52 7.30
14.0 but less than 15.0 1.00 1.12 1.25 1.40 1.57 1.76 1.97
15.0 but less than 16.0 0.90 1.01 1.13 1.26 1.42 1.59 1.78
16.0 or more 0.80 0.90 1.00 1.12 1.26 1.41 1.58

10. Massachusetts Revenues (cont)
Reimbursable
Federal & Massachusetts law allows both governmental
& private non-profit (501C3) employers, as well as Indian
Tribes to elect to reimburse for the full cost of their share
of benefits paid to former workers,
Govt. election is for a period of two years, non-profit for
one year. Must inform DUA in writing of change in
election.
Billed monthly for cost of all benefits paid.
No charges for benefits may go to the private
contributory Solvency Account.
Any overpaid amounts must still be reimbursed, and not
refunded until recovered.

11. Economic Stimulus Bill - ARRA
Title II Assistance for Unemployed Workers and
Struggling Families
Extends Emergency Unemployment Compensation
program from 3/31/09 to 12/31/09 with phase out to
5/31/10. Paid from general revenues – no repayment
Increase on weekly benefit payments by $25 with state
agreement. Benefits and administration from general
revenues. Weeks of unemployment through 1/1/10 with
phase out ending 6/30/10.
Provides 100% federal funding for federal-state
extended benefits (EB) through 1/1/10.
Special Transfers for UI Modernization. $7 billion
incentive payments for state law provisions and $500
million for administration.

12. Economic Stimulus Bill (cont.)
Waiver of interest payments & accrual on “Title
XII” loans through 12/31/10.
Limits federal income tax on UI payments by
excluding the first $2,400 from gross income.
Dedicates $250 million to reemployment
services for UI claimants, out of a total of $400
million for employment services.
COBRA premium subsidy of 65% for
involuntarily unemployed for 9 months duration
through the end of 2009.

13. Additional Information
Executive Office of Labor Workforce Development
Website
http://www.mass.gov/eolwd

15. UI Modernization
$7 billion special transfers – Mass. share $161.3 million.
Transfer by SOT to state’s UI Trust Fund. Incentive
payments for state law modernization.
Used for payment of UI benefits or
may be appropriated for UI administration or reemployment
administration.
$500 million for administration of states UI program and
state reemployment activities. Available to all states.
Mass. Share $11.6 million. Will be transferred to state’s
UI Trust fund but may not be used for benefits.
Used to carry out changes to state law required to meet special
transfer requirements.
Outreach to individuals eligible due to state law changes
Improvement of benefits and tax operations.
Staff assisted reemployment services for UI claimants.

16. Special Transfer Requirements
$7 billion
First 1/3
States Base Period, or an Alternate Base Period adopted, must
include the most recent completed calendar quarter prior to filing
of a claim.
Second 2/3’s. State law must meet 2 of the 4.
•Search for work in the benefit year must allow for part time work
search only. Base period history of part time employment can be
required – majority of weeks of work
•Individual not disqualified from UI for separation from work due to a
compelling family reason, must include domestic violence,illness or
disability of immediate family member, relocation with one’s spouse
beyond commuting range and for change in spouse’s work location.
•Approved training extension of 26 weeks.
•Dependents allowance of minimum $15 per week, maximum not
less than $50 or 50% of WBA.