During the coronavirus pandemic, there has been a fair amount of attention paid to the issue of unemployment insurance benefits. Usually, these conversations revolve around the amount of benefits to be paid to those off work due to COVID-19, the length of these expanded benefits, and who is eligible to receive them.
Yet, transportation business owners and operators have a slightly different question: How will this infectious disease impact their unemployment-related costs?
This is a reasonable concern since states determine a business’s unemployment insurance tax rate based on the number of employees who are placed off work.
Though this number has fluctuated wildly throughout the pandemic—with some companies and industries hit harder than others—it will likely be some time before unemployment rates return to their pre-COVID status.
This places businesses at a huge disadvantage if they are penalized for not being able to carry a full staff.
Individual states’ responses
Fortunately, some states are taking action to address this concern. For example, on December 2, 2020, the Texas Workforce Commission published a statement that says, in part, that it “continues to explore options to keep the 2021 tax rates as low as possible for Texas employers.”
Pennsylvania’s Office of Unemployment Compensation provides an online response as well, indicating on its website that while employers were originally charged for all employees who were off work during the pandemic, they are entitled to receive full credits for those charges.
Michigan’s Department of Labor and Economic Opportunity puts it rather simple in their online statement: “An employer or employing unit that is required to close or limit its operations due to an executive order, will not have a UI tax rate increase if its employees file for benefits.”
So, in this state at least, employers have some level of protection, as long as their increases in unemployment are a result of the state’s orders.
A changing landscape
Just as states are consistently changing their guidelines regarding business operations and social distancing as they strive to keep the pandemic to manageable levels, they are also regularly updating their responses for the companies impacted most.
Therefore, just because a specific piece of guidance is issued today, that doesn’t mean that this same guidance will apply tomorrow.
Understandably, this has created some stress and frustration as individual businesses seek to understand the impact that the pandemic will have on them, of which unemployment costs is only one.
There is also the loss in revenue, for instance, that in some cases has forced long-standing companies to close their doors for good.
What does this mean for businesses?
Because responses to the pandemic are fluid and fluctuating, trucking businesses may benefit from regularly monitoring their state’s department of labor website. Some even enable you to sign up for email notifications whenever a change is made.
While this may not provide definitive answers as to what lies ahead or how the increases in unemployment will impact your costs, it at least keeps you abreast of what is happening right now.
Admittedly, this may not provide a whole lot of consolation, but it’s the reality of where we are until we can reach some sort of stability with the disease, which may not occur for quite some time.
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