April 10, 2022 8:50pm
UI rate freeze will save Kentucky businesses $130 million in 2022
Recently signed into law by Governor Beshear, House Bill 144 provides continued relief to Kentucky businesses by freezing the unemployment insurance (UI) assessment rates at 2020 levels. Sponsored by Rep. Russell Webber (R-Shepherdsville), a 2021 GLI Most Valuable Policymaker, HB 144 will ease the burden for Kentucky employers who continue to struggle with workforce and supply chain issues as the economy emerges from two years of the COVID-19 pandemic.
In March 2020, as the pandemic set in and thousands of Kentuckians applied for unemployment benefits, Kentucky’s UI trust fund was depleted, leading to less favorable rate schedules and higher contribution rates for employers. The rate schedule fell to Schedule E in 2021and Schedule C in 2022 due to the depletion of the fund, which would lead to higher UI contribution rates for employers. Schedule A is the lowest rate schedule provided for by law and when the UI trust fund falters, it leads to an increase in the rate schedule and higher expenses for employers. House Bill 144 keeps Schedule A in place, as it was place prior to the COVID-19 pandemic, saving Kentucky employers approximately $75 per employee and a total of $130 million for 2022.
Lawmakers allocated an additional $242 million in federal relief funds to the UI trust fund as part of HB 144. This contributions will restore the health of the UI trust fund and ensure that Kentucky’s UI system is prepared for future downturns.