Unemployment Insurance

COVID-19-Related Expansions to Unemployment Insurance

• The federal CARES Act’s Pandemic Unemployment Assistance (PUA) Program provides federally funded unemployment benefits to individuals facing COVID-19-related unemployment who would otherwise be ineligible for benefits (e.g. those who are self-employed, seeking part-time employment, or who lack sufficient work history). Benefits are available for up to 79 weeks. PUA claims may be filed at this link.
• The federal CARES Act provides an additional $300/week of federally funded unemployment benefits through the week ending September 4, 2021 to all employees receiving unemployment compensation. This $300 is on top of regular unemployment benefits, which range from $278 to $823 (equal to about half of your average weekly wages).
• Workers can apply for unemployment not only if they are laid off due to COVID-19, but also if they are put on “standby” (where they have an expected return-to-work date – typically within four weeks), have had their hours reduced, or if they are unable to work due to a quarantine (whether this is externally mandated, or a self-quarantine due to a reasonable fear of exposure).
• Work search requirements are reduced – a worker must be “capable of, available, and actively seeking work that is suitable for them.” They do not need to accept work that endangers their health, and they do not need to actively seek employment if they are limited by having to care for a child or other sick family member due to COVID-19. An employee on “standby” must maintain contact with his employer and be available for “suitable work” offered by the employer, but does not need to search for other work while on standby.

Regular Unemployment Insurance

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.

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.