STATE HOUSE, BOSTON, MAY 20, 2014…..Businesses facing a short window to make unemployment insurance payments to the state before the end of the month have experienced some technical issues with the online billing system, but Patrick administration labor officials say the glitches are minor and are being dealt with.
The Executive Office of Labor and Workforce Development finished loading the unemployment insurance rates into its computer system on Monday when bills were also sent through the mail to employers.
The new web-based system for collecting insurance payments from employers was first brought online in 2009 when defects forced the administration to hire additional staff to process complaints and, in some instances, waive fees and defer interest on late tax payments. The other side of the system used to manage benefits for the jobless was also plagued by delays and defects, and has been the subject of legislative investigation.
During a webinar Tuesday, Associated Industries of Massachusetts Executive Vice President John Regan said the employer trade group was hearing from its members about problems a day after state officials “fully loaded” their computer system with rates for individual employers.
Lawmakers and Gov. Deval Patrick this year agreed to push back the due date for first quarter premiums to May 30, from April 30, after it took months for state officials to agree on a rate freeze law.
“There are some problems,” said Regan. “There are some concerns about accuracy.”
Regan encouraged employers to carefully review their rates to make sure they are accurate while being mindful of the 10-day window to make payments. He later told the News Service that the Department of Unemployment Assistance has been responsive to concerns, but said he wanted to make his members aware so they wouldn’t wait until the last minute to review their bills.
Some employers said they have faced interest charges in connection with allegedly late payments. “Clearly that’s a coding error and the division is trying to fix that,” Regan said.
Other employers were surprised to discover no charges due to the state workforce training fund, Regan said, adding that division officials were also working on that issue and expected to solve it “very quickly.”
The state expects to collect $21 million from employers for workforce training.
A spokeswoman for Labor Secretary Rachel Kaprielian said the Department of Unemployment Assistance has to run a “script” every night to eliminate the interest fees from the system, but acknowledged that it’s possible some employers have viewed their bills before the site is “scrubbed.”
“When DUA postponed the due date for the first quarterly payments, we had to trick the IT system into accepting that postponed deadline,” said spokeswoman Ann Dufresne. She said any business that incidentally pays the late interest fee will automatically receive a credit on their account.
Dufresne also said the department is aware that a screen in the system displaying workforce training fund payments shows “zero” for a quarterly calculation, but said any employer who clicks through to the bill payment screen will see the correct calculation. Paper bills mailed to employers are also accurate, said Dufresne, who added that there have not been an “abundance of complaints” so far.
As businesses begin to review and pay their unemployment insurance taxes, legislation pending before the Legislature and tied to a minimum wage hike would reform the way UI rates are calculated.
Despite the freeze in rates this year, many businesses will still see an uptick in taxes.
Retailers Association of Massachusetts President Jon Hurst said his organization got hit with a 33 percent increase in UI taxes after hiring an additional full-time employee over the past year, bringing the group to a total of five full-time employees and one part-time employee.
Hurst said the current system creates a disincentive for small businesses to grow.
“The Massachusetts system is just wacky in that you base it on last year’s wages while almost every other state does an average of the last three to five years,” Hurst said.
Both the House and Senate bills propose to move to a three-year payroll average to smooth the tax hit for growing businesses, while also increasing the taxable wage base per employee from its current level of $14,000. The Senate bill would raise the taxable wage base to $21,000; the House would raise it to $15,000.
“A wage base increase is a tax increase, particularly for a small employer,” Hurst said.
The House and Senate plans propose to counteract the wage-base increase with new rate tables that lower tax rates for high-rated employers with low workforce turnover while penalizing negatively rated employers.
Copyright 2014 State House News Service