c. Unemployment insurance

Unemployment insurance 2021, Regular Session SF192/HF135 Chapter 2 Effective: January 30, 2021

Short description This law keeps taxpaying employers’ 2021 experience ratings for unemployment insurance tax rates the same as 2020.

Summary Eliminates expiration date for exclusion of COVID-19-related unemployment claims in calculating future experience rating; adopts a temporary change to experience rating period; amending Laws 2020, Chapter 71, Article 2, Section 24.

Implications The following is a list of the sections and a short summary of the implications: • Section 1: Provides that unemployment insurance benefits paid as a direct or indirect result of COVID-19 cannot be used to calculate a taxpaying employer’s experience rating for 2021 or any year after • Section 2: Keeps taxpaying employers’ 2021 experience ratings the same as calendar year 2020 by modifying the period used to calculate them; the experience rating is calculated each year for a taxpaying employer and is part of their unemployment insurance tax rate o Generally, the experience rating increases the more unemployment that an employer’s workers experience o For 2021, an existing taxpaying employer’s experience rating would be based on the 2020 rate calculated for the period ending June 30, 2019 o For a new taxpaying employer, their 2021 experience rating would be based on the 2020 industry average rate calculated for the period ending June 30, 2019 o Means that taxpaying employers will not see a tax increase from their experience rating for 2021 as a result of increased unemployment • Section 3: Keeps taxable wages used to calculate a taxpaying employer’s experience rating for 2021 the same as calendar year 2020. Includes wages up to $35,000

Bill language https://www.revisor.mn.gov/laws/2021/0/Session+Law/Chapter/2/

Section 1. Laws 2020, chapter 71, article 2, section 24, is amended to read:

Sec. 24. COMPUTATION OF FUTURE TAX RATE; EFFECT OF PAYMENT FROM TRUST FUND. Notwithstanding Minnesota Statutes, section 268.047, subdivision 1, unemployment insurance benefits paid as a result of an applicant not being able to work directly or indirectly as a result of the COVID-19 pandemic will not be used in computing the future unemployment insurance tax rate of a taxpaying employer. This section expires December 31, 2020. Unemployment insurance benefits paid under this section must not be used in any experience rating computation required under Minnesota Statutes, section 268.051, subdivision 3, in any calendar year that occurs following enactment of this section.

EFFECTIVE DATE. This section is effective the day following final enactment.

Sec. 2. CALENDAR YEAR 2021 TEMPORARY EMPLOYER EXPERIENCE RATING. For calendar year 2021, the experience rate computed for each taxpaying employer under Minnesota Statutes, section 268.051, subdivision 3, that was required to file wage detail reports for the 12-month period ending June 30, 2019, is the ratio obtained by dividing 125 percent of the total unemployment benefits required under Minnesota Statutes, section 268.047, to be used in computing the employer's tax rate during the 48 calendar months ending on June 30, 2019, by the employer's total taxable payroll for that same period. Any taxpaying employer that does not qualify for a calendar year 2021 experience rate under Minnesota Statutes, section 268.051, subdivision 3, must be assigned a tax rate in accordance with Minnesota Statutes, section 268.051, subdivision 5, except that the average experience rating for the employer's industry must use the period specified in this section.

EFFECTIVE DATE. This section is effective the day following final enactment.

Sec. 3. TAXABLE WAGES FOR CALENDAR YEAR 2021. Notwithstanding Minnesota Statutes, section 268.035, subdivision 24, for calendar year 2021, "taxable wages" means those wages paid to an employee in covered employment for up to an amount equal to $35,000. EFFECTIVE DATE. This section is effective the day following final enactment.