8/8/2017: Maryland Unemployment Insurance Law Updates Effective October 2017
Maryland Unemployment Insurance Law Updates
Earlier this year, Governor Hogan signed several bills into law relating to unemployment insurance in the state of Maryland. Each of the following laws is set to go into effect on October 1, 2017.
SB 1169 – Charge of Benefits – Waiver Due to Natural Disaster
This law authorizes the Secretary of the Department of Labor, Licensing and Regulation (DLLR) to waive a charge of benefits to a claimant if the benefits are paid during a period when a claimant is temporarily unemployed because the employer shut down due to a natural disaster. In order to apply, the Governor must declare a state of emergency due to the natural disaster. If the waiver is applied, it shall only apply until the employer reopens, or four months after the natural disaster, whichever is earlier.
The law is seen as having a potentially significant effect on small businesses in Maryland. Generally, an employer’s state tax rate is based on the employer’s unemployment history. When small businesses are charged for benefits, the unemployment insurance tax rate may fluctuate greatly if the amount of employees seeking benefits increases. A natural disaster that requires many employees of a small business to seek benefits may result in a small business paying the highest possible employer tax rate. The law also cites, as an example, the Ellicott City flood of July 2016, which caused several small businesses to shut down.
HB 139 – Employer Determinations – Process and Appeal Rights
This law was written to clarify that the Lower Appeals Division of the DLLR has initial jurisdiction over appeals of employer account determinations, to codify an existing “review determination” process that occurs prior to an employer filing an appeal, and to extend the appeal process from 15 to 30 days.
Under the law, an employer must request an internal review (“review determination”) of the Secretary’s initial decision within 30 days. Late requests may be accepted at the Secretary’s discretion. If a review is not made within 60 days, the employer may request a notice from the Secretary that the previous determination shall stand. The employer may then appeal the review determination to the Lower Appeals division within 30 days. The next level of appeal is to the Board of Appeals within another 30 days. Further appeals may then be taken to the circuit court.
The law is not seen as having a substantial effect on businesses, however, it does give employers additional time to file appeals at all levels, which may be helpful to employers in certain cases.
HB 141 – Eligibility for Benefits – Business Operation Closings
This bill clarifies a previous law that was written to apply to the closing of a “plant,” which is generally interpreted as a building capable of manufacturing goods in large quantities. The law was rewritten so that members of the public do not incorrectly assume that the exemption only applies to manufacturing businesses. The new law clarifies that the exemption applies to a “business operation.”
Under the law, when a business operation closes for “inventory, vacation, or another purpose” causing unemployment for a period of 10 weeks or less, the Secretary may exempt employees from the requirement to actively seek work in order to obtain unemployment benefits. This only applies if employees return to work for the employer within 26 weeks, the employer and affected employees jointly request the exemption, and the Secretary determines that the exemption will “promote productivity and economic stability” within Maryland. In effect, the law allows an affected business to maintain its workforce during a temporary closing with the assurance that the workforce will return to work whenever any issues are resolved.
HB135 – Electronic Transmission of Information
This law authorizes employers and individuals to electronically send information or documents, including a request for determination or appeal, to the DLLR. Likewise, the DLLR may send a determination, redetermination, appeals decision, notice, or any other document to employers electronically. The DLLR is also required to adopt regulations for the electronic transmission of information. The law was written to clarify for employers and individuals that they need not transmit documents and filings by direct mail and may instead send them electronically.
If you have any questions regarding this article or Maryland unemployment insurance laws, contact Matthew Kuspa at mkuspa@fandpnet.com.