Honolulu, Hawaiʻi – A bill that aims to provide unemployment insurance relief to Hawaiʻi employers is heading to the Governor’s desk after unanimously passing both chambers of the Hawaiʻi State Legislature.
If signed by the Governor, HB 1278 would help to contain the economic fallout from COVID-19 by temporarily reducing the unemployment insurance contribution rates.
“This measure is critical in helping to protect employers from facing higher tax rates at a time when they can least afford it,” said Senator Brian Taniguchi (District 11 – Mānoa, Mākiki, Punchbowl and Papakōlea), chair of the Senate Committee on Labor, Culture and the Arts. “Without any legislative intervention, the unemployment tax rate schedule would be set to the highest rate at Schedule H and many businesses would continue to struggle while trying to survive this pandemic.”
HB 1278 would also:
· Set the employer contribution rate for calendar years 2021 and 2022 at schedule D.
· Permit the Director of the Department of Labor and Industrial Relations (DLIR) to omit benefits charged for experience rating for employers due to the event of COVID-19 in calendar years 2020 and 2021.
· Authorizes the DLIR to provide relief for certain reimbursable employers as well as housekeeping provisions.
"Our businesses are struggling and need support. By adjusting the unemployment insurance contribution rates we are giving them a tax break that will hopefully help them stay in business without further layoffs," said Representative Richard H.K. Onishi (District-3, Hilo, Kea‘au, Kurtistown, Volcano, Pāhala). "Together we will get through this economic downturn and pandemic."
The business and non-profit sectors have also given support for the measure.
"We are grateful as this legislation includes State support for what are called reimbursing employers, typically not-for-profits, that are paying for unemployment claims. These reimbursing employers have seen a direct cost increase up to 1,600% from the previous year and are paying for these costs now," said Ryan Kusumoto, President & CEO, Parents & Children Together. "This legislation will benefit the community as these organizations will be able to reinvest these savings to serve our most vulnerable by keeping Hawaii safe, healthy, and engaged."
"The Chamber would like to thank the Legislature and the Administration for their leadership in advancing much needed government relief for employers. Since the onset of the COVID-19 pandemic in March 2020, businesses have been tethering to keep stores open, workers employed, and make ends meet with less revenue," said Sherry Menor-McNamara, President & CEO, Chamber of Commerce Hawaiʻi. "This legislation will have a significant impact on our local businesses ability to recover from the economic hardship brought on by the pandemic."
Governor David Ige has 10 days to approve, veto or allow HB 1278 to become law without his signature.