Legislative leaders announce deal on UI trust fund, worker pay

House and Senate leaders have announced an agreement to replenish the state’s unemployment trust fund and provide bonuses to frontline workers. Both bodies hope to pass the legislation and have it on the governor’s desk by Friday.  

The deal would fully replenish the unemployment insurance trust fund at $2.7 billion and provide $500 million for bonuses to workers whose job put them at greater risk of contracting COVID-19.

“Our highest priority was ensuring that workers who were on the front lines of COVID receive the bonuses they were promised nearly a year ago,” House Speaker Melissa Hortman (DFL-Brooklyn Park) said in a statement. “I'm pleased we were able to finally reach an agreement with Senate Republicans to deliver these bonus checks – at double the amount agreed to last session.”

The agreement announced Thursday would send an estimated 667,000 workers checks of $750. The pool of workers eligible will be defined by the House.

Using the House language is important, Hortman said during a media availability, because it makes eligible some of the lowest paid workers who were on the front line, including meat packers and grocery store workers.

Much of the funding for the agreement will come from federal American Rescue Plan dollars. About $190 million of the $1.15 billion remaining in that fund will be set aside for Gov. Tim Walz to use for ongoing COVID programs.

Unemployment insurance

Monday, the House passed an amended version of HF3166/SF266*, approving the $2.7 billion Senate plan to replenish the unemployment insurance trust fund, which was emptied during the COVID emergency. It would use American Rescue Plan dollars to repay money borrowed from the federal government and return to the trust fund to pre-pandemic levels.

Without action by the Legislature, businesses would have had to pay to refill the fund through a surcharge and increased base rates on payroll taxes, which are paid quarterly. The first quarter payments are due this week. 

In passing the bill, the House added a provision that would extend unemployment insurance to hourly school workers who don’t work year round. The agreement does not include this provision. 

Frontline workers

Both bodies agreed to $250 million for frontline workers bonus pay last year, before an expected $9.25 billion state budget surplus was announced. A bicameral working group could not agree to who would be eligible for the bonus pay.

In February, the House passed HF2900 that would appropriate $1 billion to provide payments of up to $1,500 to frontline workers in fields such as long-term and home care; health care; emergency responders; courts and corrections; social service; child care; school workers; food service workers; retail, including sales, warehouse and delivery; transportation workers, janitorial services and manufacturing.

The Senate pool of eligible workers was more limited, including first responders, law enforcement, and health and long-term care workers.