April 9, 2021
On Tuesday, April 6th, the Mass Department of Unemployment Assistance (DUA) released 2021 employer unemployment rates almost three months late. Despite the assurances of the governor and legislative leaders that rates would not increase in 2021 and 2022, almost all employers saw increases in their rates. These increases are retroactive to January 1st creating enormous tax burdens for many employers.
While the state did indeed utilize the same rate schedule (schedule e) to calculate the rates for 2021, the DUA used a little known or understood provision, called the Solvency Rate, to increase rates across the board for virtually all employers. In the director’s letter of April 6th he states, “The solvency rate used in the calculation of each company’s UI experience rate for 2021 is 9.23%, an increase from last year’s rate of .58%. This uniform solvency assessment to employers covers the cost of benefits charges that are not the responsibility of individual employers. Additionally, as required by the non-charging provision of the CARES Act, all regular Covid-19 related claims for private contributory employers were charged to the solvency fund.”
The solvency rate typically is set between .5 and 2%. Prior to the Tuesday rate notices, no state officials had mentioned this unprecedented increase in the solvency rate. The change to 9.23% increases the solvency rate by 1400%.
This is an enormously complicated and difficult situation given that the quarter ended last week and any increases are retroactive to January 1st.
We would encourage all employers to contact their state representative, state senator, and the governor’s office to express your displeasure over this increase.
BizChecks Payroll will be working next week to process a prior quarter adjustment payroll for all employers. This will require a significant amount of time and effort on our part and we ask that you remain patient as we process the adjustment payrolls. We will notify you when the adjustment reports are available to view in iSolved. Our current plan is to then debit the first quarter retroactive tax amounts on April 23rd so that they may be remitted in a timely manner.
You can see your 2021 rate on the payroll summary report next payroll, or login to your DUA account and go to correspondence. The 2021 rates are in the director’s letter. If you do not know your DUA login, please contact DUA customer service at 617-626-5075 or at UIEmployerHelp@DETMA.org.
We will provide additional information as it becomes available.