The Senate today unanimously passed bipartisan legislation chief-authored by Senator Eric Pratt (R-Prior Lake) that would hold employers harmless to unemployment insurance experience ratings due to COVID-19 closures and shutdowns. Record unemployment in 2020 as a result of COVID-19 and the Governor’s Executive Orders, would have dramatically increased the amount businesses would need to pay into the Unemployment Insurance Program.

“This bill is going to help our businesses and employers afford to hire back employees,” said Senator Pratt. “So many employers had to lay off their employees because of the pandemic, and normally, they’d be forced to pay a higher premium if they have to draw from the insurance pool. We want to make sure our employers aren’t penalized for things outside of their control.”

An end-of-2020 sunset on language that stated unemployment benefits paid as a result of the COVID-19 pandemic would not be used in computing the future Experience Rating of unemployment insurance taxpaying employers led to this legislation. These ratings are typically calculated based on taxable wages and benefits paid by the employer over the previous 48-month period.

To make sure the Experience Ratings paid as a result of COVID-19 are not factored into the calculations, the Unemployment Insurance (UI) Program needs to examine each individual charge and determine whether or not it is related to COVID-19. This bill will ensure that employer’s experience ratings are held harmless by carrying their 2020 experience rating forward into 2021, it will give the UI Program the time it needs to remove benefit charges relating to COVID-19, and it caps the taxable wage base for UI at $35,000 for 2021. Also included is language that ensures COVID-19-related UI benefits will never be used to compute employer Experience Ratings now or in the future.

“It’s critical that our employers be held harmless for COVID-related layoffs,” Senator Pratt added. “DEED will hold all employers’ rates flat for 2021, and taxable income will be held flat for 2020. Our businesses have been suffering for nearly a year, and this is a move in the right direction towards economic recovery.”