Advocacy News – December 18, 2020
Legislation supported by the Michigan Chamber dealing with Michigan’s unemployment insurance (UI) system is on the move in the final days of the Lame Duck session
Senate Bill 604, which was passed by the Senate on Dec. 10 and the House last night, would continue to extend UI benefits from 20 to 26 weeks, the “noncharging” of COVID-19 related unemployment claims to employer UI accounts, allow employees to file for UI for COVID related absences and expand the UI Workshare Program. All of these provisions, which have been in effect since the spring, would continue through March 31, 2021.
The legislation specifies that the 26-week provision could not go into effect unless the Legislature appropriates money to cover the additional weeks of state benefits. This provision was included to address concerns raised by the Michigan Chamber that Michigan’s UI Trust Fund, which is entirely funded by Michigan employers via payroll taxes, is on the verge of bankruptcy. At the start of the pandemic, the UI Trust Fund had over $4 billion. The Trust Fund balance is now less than $987 million and draining quickly. As the pandemic continues and businesses remain shuttered, it is increasingly looking like the Trust Fund will need to borrow from the federal government which will cause an increase in UI taxes for employers as they will have to not only pay the debt but build up the Trust Fund for the future.
We believe the cost of pushing out benefits for another three months is approximately $220 million and that’s what we have been advocating for. We expect the appropriation to be included in a larger spending bill the Legislature is working to pass over the coming days to provide emergency aid for businesses shut down due to COVID. That budget bill is currently under negotiation with the Whitmer Administration.
Senate Bill 604, if signed by the Governor, helps employees and employers alike. It will help Michiganders who are jobless continue to receive assistance and it will hold struggling employers, some who are not even allowed to be open, harmless for even more debt or tax hikes.
Please contact Wendy Block with any questions at wblock@michamber.com.