HB 5377 — AN ACT CONCERNING THE REMOVAL OF COVID-19 RELATED LAYOFFS FROM THE UNEMPLOYMENT COMPENSATION EXPERIENCE ACCOUNT.

House ofBill Representatives General Assembly File No.

2545377 JanuaryPublic Session,Act 2021 House Bill No.

537721-5 HouseAN ofACT Representatives,CONCERNING AprilTHE 6,REMOVAL 2021OF TheCOVID-19 CommitteeRELATED onLAYOFFS LaborFROM andTHE PublicUNEMPLOYMENT EmployeesCOMPENSATION reportedEXPERIENCE throughACCOUNT. REP.

PORTER of the 94th Dist., Chairperson of the Committee on the part of the House, that the bill ought to pass.

AN ACT CONCERNING THE REMOVAL OF COVID-19 RELATED LAYOFFS FROM THE UNEMPLOYMENT COMPENSATION EXPERIENCE ACCOUNT.

["contributing employer"] (2) "Contributing employer" means an employer who is assigned a HB5377percentage /rate Fileof No.contribution under the provisions of this section;

254["reimbursing 1employer"] HB5377(3) File"Reimbursing employer" means an employer liable for payments House Bill No.

2545377 percentagein ratelieu of contributioncontributions underas theprovided provisionsunder ofsection this31-225; section;

["reimbursing employer"] (3) "Reimbursing employer" means an employer liable for payments in lieu of contributions as provided under section 31-225;

Subsection (d) of section 31-225a of the general statutes is repealed andthefollowing issubstituted inlieuthereof(EffectiveOctober HB53771, /2021): File No.

254Public 2Act HB5377 File No.

25421-5 1,2 2021):of 3 House Bill No.

5377 (d) The standard rate of contributions shall be five and four-tenths per cent.

ThisApproved actMay shall3, take2021 effectPublic asAct followsNo. and shall amend the following sections:

Section21-5 13 Octoberof 1,3 2021 31-225a(a) Sec.

2 October 1, 2021 31-225a(d) LAB Joint Favorable HB5377 / File No.

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254 The following Fiscal Impact Statement and Bill Analysis are prepared for the benefit of the members of the General Assembly, solely for purposes of information, summarization and explanation and do not represent the intent of the General Assembly or either chamber thereof for any purpose.

In general, fiscal impacts are based upon a variety of informational sources, including the analyst’s professional knowledge.

Whenever applicable, agency data is consulted as part of the analysis, however final products do not necessarily reflect an assessment from any specific department.

OFA Fiscal Note State Impact:

None Municipal Impact:

None Explanation The bill, which disregards certain unemployment insurance benefits charges for the purposes of calculating employers' unemployment tax rates, does not result in any fiscal impact as costs not directly charged to a specific employer will be handled as pooled costs spread among all employers.

The Out Years State Impact:

None Municipal Impact:

None HB5377 / File No.

254 4 HB5377 File No.

254 OLR Bill Analysis HB 5377 AN ACT CONCERNING THE REMOVAL OF COVID-19 RELATED LAYOFFS FROM THE UNEMPLOYMENT COMPENSATION EXPERIENCE ACCOUNT.

SUMMARY This bill disregards an employer’s benefit charges and taxable wages betweenJuly 1, 2019, andJune30,2021, whencalculating theemployer’s unemployment tax experience rate for taxable years starting on or after January 1, 2022.

In effect, this means that the unemployment benefits paid to an employer’s former employees during that period will not affect the employer’s experience rate.

The bill's provisions apply to the extent allowed by federal law and as necessary to respond to the spread of COVID-19.

The bill similarly disregardsthestatewidebenefitsandtaxable wages for calendar years 2020 and 2021 when calculating the unemployment tax rate that will apply to new employers for tax years starting on or after January 1, 2022 (see BACKGROUND).

Thus, the rate charged to employers who have not participated in thesystem long enough to have their own experience rates will not be affected by the benefits paid during those years.

EFFECTIVE DATE:

October 1, 2021 EXPERIENCE RATES By law, an employer’s experience rate generally depends on the amount of unemployment benefits its former employees received during its“experienceperiod,”whichisthethree-yearperiodpreceding each June 30, when an employer’s rate is calculated.

Under current law, an employer’s rate is determined by calculating the ratio between the amount charged to the employer’s experience account (generally, the HB5377 / File No.

254 5 HB5377 File No.

254 amount of benefits paid to its former employees) and the amount of the employer’s taxable wages during the experience period.

This ratio is converted to a percentage between 0.5% and 5.4%, which becomes the employer’s experience rate (CGS § 31-225a(e)).

For tax years starting on or after January 1, 2022, the bill requires that an employer’s experience period disregard the employer’s benefit charges and taxable wages from July 1, 2019, through June 30, 2021, when applicable.