Senate passes bill to address unemployment insurance rate hikes

The Senate today passed HB 2169, which will help reduce increases in unemployment taxes for Hawaii businesses, while maintaining funding for unemployment benefits. Because the bill has already passed the House and was not amended by the Senate, it is expected to receive final House approval quickly, and that Governor Lingle will sign the bill into law next week. 

“HB2169 will provide timely, significant tax relief for businesses while maintaining unemployment benefits for those who are underemployed or unemployed through no fault of their own.  Both the $241 million in tax relief over two years and ensuring the underemployed and unemployed have full unemployment benefits will support the state’s economic recovery,” said Senator Dwight Takamine, chair of the Labor Committee. “Ensuring adequacy of the Unemployment Trust Fund will buffer businesses against any reoccurrence of the current situation where businesses were hit with higher taxes precisely at the time that they can least afford it.” 

The Department of Labor and Industrial Relations (DLIR) had requested that the legislature “fast-track” the measure to help the department process new unemployment tax bills for employers before the bills were due to go out in April.  Previously, the House unanimously passed the measure on to the Senate on February 18.  A joint Senate committee composed of the Labor and Ways and Means Committees passed the bill unamended on February 26 to help expedite the measure’s passage by DLIR’s March 12 deadline. 

“This is the Chamber of Commerce of Hawai’i’s only priority this session and the Chamber and members of the business community deserve much of the credit for getting this measure through the legislative process,” Takamine said.

“HB2169 will change the effective tax rate for covered employees from 2.3% to 1.5% or an average cost per employee from $591 to $379. It has been widely reported that the “average” annual unemployment premium was jumping from $90 to $1,070 in 2010.”