Legislature votes to bolster unemployment insurance system

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Unemployment claims are lower than they were earlier in the year, yet problems plague the system.

Emergency measures to help struggling businesses pay less in unemployment insurance taxes while simultaneously granting more funding to the unemployed were voted out of the Maryland Legislature last week and await signature from Gov. Larry Hogan, R.

Raising from $50 to $200 the weekly amount of uncounted pay that unemployment insurance claimants can receive is among the measures, which come as the Maryland Department Labor continues to receive thousands of claims each week.
The department reported receiving more than 12,000 new and reclassified claims last week, the lowest mark of the month.

While this is an improvement from the 50,000 claims recorded in the last week of January, the state’s numbers have see-sawed for much of the year.

Employers pay unemployment insurance taxes to both federal and state governments – payments to the latter are deposited into a trust fund, from which money is drawn to pay out claims.

In Maryland, individuals who lose their job through no fault of their own, and who are actively seeking work, can receive up to $430 per week in unemployment insurance.

The amount that claimants receive is partially based on their current weekly wage total – the higher someone’s wages, the less they’ll receive in unemployment.

Under Maryland law, the first $50 of a claimant’s weekly wage is disregarded from the amount used to calculate that claimant’s weekly benefit.

Following the initial $50, a claimant’s benefit decreases dollar for dollar, according to a legislative analysis.

The legislature’s plan would raise the disregarded amount to $200, allowing for claimants to earn higher wages without their benefits being cut.

The increase in unemployment insurance taxes that could be incurred by businesses concerned groups such as the Maryland Retailers Association and the Maryland Chamber of Commerce.

However, Hogan announced last week that Maryland expects to receive $3.9 billion as part of a new federal aid package, more than $1 billion of which will be put toward the state’s unemployment insurance trust fund.

This aid will increase the fund’s solvency and should stabilize unemployment insurance tax rates for the next two years, meaning that employers won’t have to pay as much.

Sen. Katherine Klausmeier, D-Baltimore County, a sponsor of the plan, said she believes that Maryland’s unemployment insurance trust was insufficiently funded even before the pandemic, which she said “blew the doors off.”

Employers would also receive a break through a bill providing flexibility to small businesses that, as a result of the pandemic, may still be paying more than usual in unemployment insurance taxes.

The Maryland Department of Labor currently offers payment plans to employers, but another bill in the legislature would provide more flexibility as long as the state’s trust fund remains below its lowest threshold. This bill also passed last month.

When the trust fund balance drops below its lowest threshold, unemployment insurance taxes increase the following year to compensate for the loss.

A plan for unemployment insurance taxes to increase gradually over the next two years is awaiting House approval after lawmakers voted it out of the Senate Monday.

Another bill, SB0818 (HB1138), would mandate weekly and monthly unemployment insurance updates on the labor department’s website.

“Marylanders deserve a Department of Labor that operates in an open and transparent manner,” sponsor of the House version of the bill, Del. Ned Carey, D-Anne Arundel, expressed in his testimony for the legislation.

The bill, which is also on the governor’s desk, would also establish a playbook for times of “disaster,” like the pandemic, which would include a requirement that the labor department hire additional employees during such times.

The “disaster plan” would be initiated once the unemployment rate remains above 6% for one month, and would remain in effect until the labor department’s unemployment insurance pay rate reflects the national standard – at least 87% of payments being dispersed within 21 days.

In December, Maryland had the third-lowest pay rate in the country, with just under 28% of payments being dispersed within three weeks, according to The Pew Charitable Trust.

Klausmeier said the department was not prepared for an onslaught of claims, adding that it didn’t have enough staff to answer the volume of calls it was receiving.

Prior to the pandemic, the department’s Division of Unemployment Insurance was at its lowest staffing capacity since its inception, Labor Secretary Tiffany Robinson said in a Feb. 24 Maryland Board of Public Works meeting.

Robinson said at the time that the division was receiving more than 21,000 daily calls.

In response, the program increased its claims center staffing by 500% and expanded hours of operation to seven days per week, Robinson said.

Some of those unable to reach the labor department for help have been contacting their elected officials.

Klausmeier said that her office has received roughly 15 calls and emails virtually every day since March from constituents seeking help filing their claims – though, Klausmeier said that her staff usually refers these constituents back to the labor department.



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