Representative Jones, Senator Tarr Support COVID-19 Relief Bill

The House and Senate have finalized a COVID-19 relief package to assist Massachusetts’ small businesses and employees as they continue to deal with the economic fallout from the coronavirus.

House Minority Leader Bradley H. Jones, Jr. (R-North Reading) and Senate Minority Leader Bruce E. Tarr (R-Gloucester) supported the bill, which offers tax relief to employers and emergency paid sick leave to workers impacted by the pandemic. The bill was enacted in both branches on March 25 and is now awaiting Governor Charlie Baker’s signature.

The relief package calls for a two-year unemployment insurance (UI) rate freeze for employers to mitigate the impact of a scheduled April rate increase. It also waives state taxes on forgiven federal Paycheck Protection Program (PPP) loans for so-called “pass-through” entities, as well as federal Economic Injury Disaster Loans.

For employees, the legislation provides access to up to 40 hours of COVID-related emergency paid sick leave, along with tax relief for lower-income workers who collected unemployment in 2020 and 2021. The bill allows those individuals to deduct the first $10,200 in unemployment compensation received in both calendar years.

“The House and the Senate are committed to helping the state’s small businesses and employees who are continuing to struggle during the pandemic,” said Representative Jones. “Without legislative intervention, employers will see a 60 percent increase in their unemployment insurance costs and many independent contractors, restaurants and small businesses will collectively be facing another $150 million in state taxes on their PPP loans. This legislation will deliver essential tax relief to the state’s small businesses and employees and will help to protect jobs as the state looks to position itself for a strong post-pandemic recovery.”

“This legislation takes critical steps to support the employers we are counting on to drive an economic recovery and employees across our state that are trying to stabilize household budgets against the tremendous weight of COVID-19 challenges,” said Senator Tarr. “Through the measures this bill puts into action, they will each have substantial tools and resources to not only overcome the financial damage done by the pandemic but also build a solid foundation for future growth and prosperity. Passing the bill is an important first step down the road to a re-energized and renewed economy, and it's being taken not a moment too soon.”

Employers will be required to provide emergency paid sick time to employees who are unable to work due to the coronavirus, including those who are self-isolating; receiving medical treatment or an immunization; recovering from a disability due to COVID-19; complying with a quarantine order; caring for a family member including a domestic partner; or are unable to telework due to COVID-19.

The bill also establishes a COVID-19 Emergency Paid Sick Leave Fund, which will be administered by the Executive Office for Administration and Finance and used to reimburse eligible employers for providing emergency paid sick leave, with a maximum reimbursement of $850 a week per employee.

The bill prohibits the Department of Revenue from imposing any tax penalties for 2020 based solely on a failure to remit taxes on unemployment compensation. Taxpayers who have already been assessed the penalty will receive an abatement.

In addition to mitigating the scheduled UI rate increase, the bill authorizes up to $7 billion in borrowing to repay federal UI loans and includes a temporary two-year employer assessment to ensure the state’s UI Trust Fund remains solvent.

The bill requires the Department of Family and Medical Leave to analyze the possibility of expanding the state’s family and medical leave program to provide coverage for future communicable illnesses related to a public health emergency, with a report due by December 31, 2022. It also creates a 21-member special commission to study and develop recommendations for the long-term solvency of the Unemployment Insurance Trust Fund, with a report due by December 15, 2021.