Senator Mathews: Landmark Unemployment Insurance and Frontline Worker Agreement Passes Senate

Today, the Minnesota Senate passed a bill that resolves the differences between repaying and refilling the Unemployment Insurance (UI) Trust Fund and providing bonuses to workers who worked the frontline during the COVID pandemic. The bill passed with bipartisan support this afternoon. 

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.  

“Fully repaying our state’s Unemployment Insurance Trust Fund debt makes good on a promise given to employers when they were forced to close during the pandemic,” Senator Andrew Mathews (R-Princeton) said. “This legislation will ensure our small businesses that are recovering from the pandemic are not further burdened with a tax increase. It will also protect this important worker benefit for those who need it in the future.”

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 most at risk during the COVID pandemic. As the Senate proposed two weeks ago, the House DFL will choose which workers will get bonuses.