A 2021 bill designed to prevent unemployment tax hikes for Connecticut employers that laid off employees during the pandemic inadvertently resulted in increases for 14,561 businesses.
Public Act 21-5 was passed unanimously by both the state House and Senate after the state lost a historic 292,400 jobs in March and April of 2020.
The legislation was intended to shield employers from the costly impact of pandemic-related layoffs on their unemployment experience rating accounts.
An established business’ experience rate is typically calculated by looking back at the number of times its employees received unemployment compensation over the last three years.
Given that most of the pandemic related high levels of unemployment occurred during 2020 and 2021, the legislation simply dropped the 2020 and 2021 benefit years from that calculation.
The unemployment tax rates for businesses were then calculated using just the 2019 benefit year.
Employers impacted by the change in calculation called for a report to determine the true impact of the 2021 legislation, with the General Assembly commissioning that study (Special Act 22-13) last year.
The state Department of Labor recently submitted its report to the legislature’s Labor and Public Employees Committee.
That report shows 88% of the 117,521 contributing employers saw either a decrease in their unemployment tax rate or no change at all.
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