In an effort to shield businesses from paying increased costs due to massive strains on the unemployment insurance system at the height of the COVID-19 pandemic, the Senate Appropriations and Revenue Committee on Wednesday passed an amended version of House Bill 144.
Sponsored by Rep. Russell Webber, House Bill 144 would suspend the taxable wage base and hold the 2020 tax schedule for 2022 when it comes to unemployment insurance. The legislation also requires all benefits paid due to a declared emergency come from a pooled account and not individual employers reserve accounts.
The amended version of the bill included an appropriation of approximately $242 million, which would restore the Kentucky unemployment insurance trust fund back to pre-pandemic levels. The appropriation will come from one-time monies Kentucky received from the American Rescue Plan Act (ARPA) of 2021.
Similar language freezing the tax rate was approved by the General Assembly in 2021. The legislation is estimated to save Kentucky employers around $70 per employee on average by freezing the rate.
While the bill had already passed the Senate Economic Development, Tourism, and Labor Committee earlier this month, it was then recommitted to the Appropriations and Revenue Committee because of the appropriation.
“The business community applauds the work of the General Assembly to return the unemployment insurance trust fund to its pre-pandemic levels while protecting businesses from a tax hike,” said Kate Shanks, VP of Public Affairs at the Kentucky Chamber. “Businesses stepped up to do their part to control the spread of the virus that caused record unemployment levels, and this legislation is critical to continued recovery from the pandemic.”
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