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New state and federal regulations have made it significantly easier for those who are partially or fully unemployed due to COVID-19 to access unemployment benefits. For the first time, self-employed individuals like farmers and other business owners are also eligible to collect unemployment benefits. This webpage answers FAQs for employers on expanded unemployment insurance, including how unemployment claims will affect rates. Apply here for unemployment insurance, and see more details on temporary changes to unemployment below:
Regular unemployment insurance is completely funded by employer contributions. The vast majority of employers in Massachusetts are required to make unemployment insurance contributions for their employees. This includes most employers of seasonal employees, unless the employer has a state permit as a seasonal employer. These permits are only available to employers with employees working less than 20 weeks who perform duties that are distinct from the duties assigned to employees at any other time of year (due to the climate or nature of the products or services).
Agricultural employers are generally required to pay unemployment contributions if they paid wages of at least $40,000 in any calendar quarter (for state unemployment taxes) or at least $20,000 in any calendar quarter (for federal unemployment taxes) OR if they employed 10 or more individuals on any day in any 20 weeks in a calendar year (whether or not these weeks were consecutive or the employees remained the same).
If your business has a non-agricultural component, note that nearly all non-farm businesses must pay for unemployment insurance. Non-farms are required to payment unemployment if they paid wages of at least $1,500 in any calendar quarter, OR if they employed one or more individuals on any day in any 13 weeks in a calendar year for state unemployment insurance (whether or not these weeks were consecutive or the employees remained the same).
The federal unemployment tax (FUTA) rate is effectively 0.6% and is paid of the first $7,000 in wages paid to each employee; if an employer does not pay their state unemployment tax on time, however, the FUTA rate is 6%. The state unemployment tax (SUTA) rate varies depending on the employer’s “experience rating,” and it is paid on the first $15,000 in wages paid to each employee. For new employers (for their first 3 years of operation) the SUTA rate in 2020 started at 2.42%, but the tax rate for experienced employers varied between 0.94% and 14.37%. The 2021 rates have gone up substantially due to COVID-related state unemployment fund insolvency, but as of Spring 2021, legislators are working on passing legislation to lower these rates.
For more information on the specific exemptions from unemployment insurance in Massachusetts, see this link.
Unless you are exempt from paying unemployment insurance contributions, informing employees of the availability of unemployment insurance is your legal responsibility as an employer. The law requires that you clearly post a copy of this poster “Workplace Poster — Information on Unemployment Insurance Benefits (Form 2553A),” which informs employees of their right to file unemployment insurance claims, and you must also give all employees who are separated from work for seven or more days a copy of the pamphlet “How to Apply for Unemployment Insurance Benefits (0590A),” which provides accurate information on your farm to help expedite the filing of claims.
This webpage was last updated May 2021 and is based upon work supported by the U.S. Department of Agriculture’s (USDA) National Institute of Food and Agriculture under award 2018-70027-28588, 2016-70017-25423, 2015-49200-24225 and by the USDA Agricultural Marketing Service through grant 16FMPPMA0002. Its contents are solely the responsibility of the authors and do not necessarily represent the official views of the USDA.