Monday, February 22, 2010

Governor Patrick Signs Unemployment Insurance Freeze

BOSTON - Thursday, February 18, 2010 - Governor Deval Patrick today signed
legislation that will provide immediate relief to Massachusetts businesses
by freezing employers' contribution to the Unemployment Insurance (UI) Trust
Fund at current levels. This new law prevents a scheduled rate hike from
taking effect, helping to save businesses almost $400 million this year.

"Without this legislation, employer costs were on track to rise by an
average of over $300 per employee. That increase was simply unacceptable to
us, "said Governor Patrick.”By freezing the rates at current levels, we are
providing businesses with the immediate relief they need to invest and grow.

"By partnering with the Legislature, we are able to provide additional
resources that will not only help businesses manage during this very
critical time, but also focus on job creation and growth in Massachusetts,"
said Lieutenant Governor Timothy Murray.

"In this tumultuous economic climate, this was a critical step in order to
help bring some immediate relief to businesses," said Senate President
Therese Murray who recently introduced legislation that would take steps to
improve business development by streamlining the state's economic
development efforts. "This is part of an overall effort we are working on to
help improve the current business climate as we work toward bigger,
long-term goals like streamlining economic development efforts and health
insurance payment reform."

“While we remain concerned about those who rely on unemployment insurance to
survive, we must also lessen the burden on our businesses, which fund our
unemployment system,” said House Speaker Robert A. DeLeo. “This bill has
sent a clear message to businesses across the Commonwealth that we are
serious about economic growth and job creation in Massachusetts.”

Employer contributions into the UI Trust Fund are tied to the amount of
reserves in the trust fund. By law, a scheduled increase was triggered on
January 1, 2010 which would have caused an increase in the average
contribution per employee of over $300 for 2010. In order to reduce costs
for Massachusetts businesses, the Governor and the Legislature agreed to
freeze the contribution at a lower rate schedule (Schedule E). This measure
will not impact benefit levels or eligibility for persons currently
collecting unemployment benefits.

"I thank Governor Patrick and the Legislature for freezing scheduled
unemployment insurance rates for 2010. This announcement will afford
employers significant savings at a time when many businesses are continuing
to struggle through a tough economy. This is the type of action AIM
advocates for and will help lead to a strong economic climate in
Massachusetts. We look forward to further meaningful discussions of related
reforms," said Rick Lord, President and CEO, Associated Industries of

"In this economy, this rate freeze is very important as we look to hold
employer costs down. Hopefully we can also get to a real reform package
which can put us into the mainstream cost wise as compared to other states,"
said Jon Hurst, President, Retailers Association of Massachusetts.

"I am pleased that the Legislature and the Governor acted so quickly to
prevent UI costs from increasing dramatically this year, and I am optimistic
that the Governor's proposed UI reform will be enacted as well," said Joanne
Goldstein, Secretary of Labor and Workforce Development.

In addition to the rate freeze, Governor Patrick has proposed several other
reforms to address the needs of employers of all sizes. Last week, in an
address to the Boston Chamber of Commerce, the Governor unveiled a small
business jobs incentive plan that provides tax credits for businesses that
create new jobs, eases healthcare costs for small businesses and increases
the availability of working capital to allow small businesses to expand. In
addition, the plan strengthens the Workforce Training Fund, supports the
Division of Unemployment Assistance's anti-fraud measures and includes
protections for workers by reducing unfair barriers to eligibility. Together
with the UI rate freeze, these additional measures will help foster job
creation and further economic growth throughout the state.

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