Unemployment insurance tax rate held constant due to COVID-19 pandemic

A taxpaying employer’s experience rating is calculated each year to determine part of their unemployment insurance tax rate.

Generally, the experience rating increases as an employer lays off more workers, and along with it, the employer’s unemployment insurance tax rate.

A new law, effective Jan. 30, 2021, temporarily sets employer experience ratings for calendar year 2021 at the employer’s 2020 rate.

The COVID-19 pandemic made it difficult for the Department of Employment and Economic Development to determine for every employer which layoffs in 2020 were due to COVID-19 and which were not, and, therefore, which layoffs would be used to calculate an employer’s 2021 experience rating.

The law is sponsored by Rep. Mohamud Noor (DFL-Mpls) and Sen. Eric Pratt (R-Prior Lake).

HF135/SF192*/CH2

SF0192* / HF0135 / CH2