Senator Roger Chamberlain (R-Lino Lakes) and the Minnesota Senate today approved a compromise bill that will stop devastating tax increases on small businesses and provide meaningful bonuses to frontline workers. The agreement resolves Senate and House differences between repaying and refilling the Unemployment Insurance (UI) Trust Fund and providing bonuses to workers who worked the frontline during the COVID pandemic.

“I’m glad we were finally able to reach an agreement,” Chamberlain said. “This should have been done months ago. It’s good for Mom and Pop businesses and their employees, and it’s an important token of our gratitude for the sacrifices frontline workers made during the pandemic. Long overdue.”

The legislation uses $2.7 billion to pay off the loan from the federal government and refill the UI trust fund to its necessary balance using mostly federal funds. This spends the remaining federal ARPA funds available to Minnesota for COVID, which otherwise would have been available to Gov. Walz on June 1 if left unspent. Even with this bill, there remains more than $6 billion from the surplus left to give back to the taxpayers.  

Businesses will have their employer UI tax rates for calendar years 2022 and 2023 recalculated to lower the base rate to 0.1% and eliminate the additional assessment and the special assessment. The recalculation stops the increases to UI tax rates that were automatically triggered in December 2021 because the UI Trust Fund was under the required balance.  

Additionally, this bill directs the Department of Employment and Economic Development (DEED) to credit or refund employers any increase in the UI tax rate that has already been paid during the calendar year 2022. DEED must waive also any interest or penalties for businesses that may make late payments on first-quarter UI taxes.  

As part of the agreement, $500 million from the surplus will go to frontline workers who were most at risk during the COVID pandemic. As the Senate proposed two weeks ago, the House Democrats will decide which workers get bonuses. The list includes everything from long-term and health care, emergency responders, public health, corrections, child care, schools, retail, transportation, and manufacturing. Eligibility requires the applicant to have worked at least 120 hours from March 15, 2020, to June 30, 2021, and cannot have received more than 20 weeks of unemployment benefits. An application process will be set up by the Department of Labor and Industry to verify eligibility. Current estimates suggest checks will be $750 per worker if the total eligible workers apply and are approved.