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REGIONAL— After months of political wrangling, the Legislature finally agreed last week on a measure that will provide $2.73 billion to replenish the state’s unemployment insurance (UI) …
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REGIONAL— After months of political wrangling, the Legislature finally agreed last week on a measure that will provide $2.73 billion to replenish the state’s unemployment insurance (UI) program. The fund took a beating as a result of the massive layoffs stemming from the COVID-19 pandemic. Gov. Tim Walz signed the measure into law last Friday.
The state’s UI fund currently owes the federal government $1.4 billion in unemployment payments that the U.S. Treasury covered to provide benefits to Minnesota workers during the height of the pandemic.. The additional $1.33 billion dedicated in the agreement will go to replenish the state’s unemployment fund balance, bringing it to approximately $1.3 billion.
The agreement will head off anticipated increases in unemployment insurance premiums for Minnesota businesses and will provide unemployment tax relief, totaling $200 million, to about 130,000 businesses.
“Minnesota businesses, especially small businesses and their workers, were deeply impacted by COVID-19,” said Steve Grove, commissioner of the Department of Employment and Economic Development (DEED). “This investment means we won’t have to raise future UI tax rates right at this critical moment of expansion for Minnesota’s economy. Avoiding higher tax payments means more money for business owners to put toward salaries, benefits and capital expenses.”
DEED will now begin calculating revisions to the amounts that over 130,000 employers owe in UI taxes.
This law also provides $500 million for Frontline Worker Pay, which will provide bonus compensation to frontline workers who have sacrificed during the pandemic to keep Minnesotans safe, healthy, fed, and cared for. Eligible workers include those from the health care, childcare, school, food service, public transit, long-term care, building service, emergency response, retail, and manufacturing sectors.