Bill aims to provide unemployment insurance relief to employers

A bill that aims to provide unemployment insurance relief to Hawaii employers is heading to Gov. David Ige’s desk after unanimously passing both chambers of the state Legislature.

If signed by Ige, House Bill 1278 would help to contain the economic fallout from COVID-19 by temporarily reducing the unemployment insurance contribution rates, the Legislature said Wednesday.

“This measure is critical in helping to protect employers from facing higher tax rates at a time when they can least afford it,” said Sen. Brian Taniguchi of Oahu’s District 11 and chairman 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.”

The bill 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 to omit benefits charged for experience rating for employers due to the event of COVID-19 in calendar years 2020 and 2021.

● Authorize the DLIR to provide relief for certain reimbursable employers as well as housekeeping provisions.

“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,” Sherry Menor-McNamara, president and CEO of the Chamber of Commerce Hawaii, said in a news release. “This legislation will have a significant impact on our local businesses’ ability to recover from the economic hardship brought on by the pandemic.”

Ryan Kusumoto, president and CEO of Parents & Children Together, added that the bill also includes state support for “reimbursing employers,” who are typically nonprofits that pay for unemployment claims and have seen a direct cost increase up to 1600 percent from the previous year.

“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,” Kusumoto said in the news release.

On Monday, the bill passed a third reading in the Senate and was sent to the governor.

Ige has 10 days to approve, veto or allow the bill to become law without his signature.