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Baker signs bill freezing unemployment rates for employers, excluding federal loans from taxation

Governor Charlie Baker spoke in Chelsea on Thursday.Craig F. Walker/Globe Staff

Governor Charlie Baker signed a bill Thursday that will freeze unemployment insurance rates and attempt to ease taxpayers’ burdens by excluding federal relief loans from taxable income, but returned part of the bill to legislators seeking changes in some areas, state officials said.

The new law maintains current unemployment insurance rates for 2021 and 2022, which will prevent a 60 percent increase from hitting employers, and does not tax Paycheck Protection Program loans and Economic Injury Disaster Loan advances, according to a Thursday letter from Baker to the Senate and the House.

It also authorizes the state to issue bonds, secured by a tax on employers, to repay advances from the federal unemployment account and help pay benefits and related expenses, according to the letter.


“This legislation takes a thoughtful and comprehensive approach in delivering critical relief to facilitate economic recovery for the people of Massachusetts,” Baker said in the letter.

The governor returned a portion of the bill requesting changes to a COVID-19 sick leave program, including a requirement that employers to provide about a week’s paid sick leave for workers who are getting immunized, become sick with COVID-19, must quarantine or isolate because of the virus, or are caring for a family member in one of those situations.

Baker asked that lawmakers iron out differences between the state’s version and a similar federal mandate, so that employers wouldn’t have to follow two sets of rules, and requested that they adopt the federal requirement that the unemployed receive no less than their usual pay rate, up to $850, or two-thirds the rate paid for family leave.

“Including this additional clarity will raise the floor for many workers who stand to benefit from this law,” Baker said.

He also asked legislators to convert funding for the leave program to a tax credit of $40 per employee, whether or not employees take leave, for employers unable to access federal tax credits. Baker said this would allow the program to continue until its set end date in September rather than shutting down when the money runs out.


Correction: Due to a reporting error, an earlier version of this story misstated a portion of the bill the governor returned to the legislature for further consideration. The governor requested changes to a COVID-19 sick leave program. The Globe regrets the error.

Jeremy C. Fox can be reached at jeremy.fox@globe.com. Follow him on Twitter @jeremycfox.