SB 771
Department of Legislative Services
Maryland General Assembly
2021 Session
FISCAL AND POLICY NOTE
Third Reader - Revised
Senate Bill 771 (Senators Hester and Rosapepe)
Finance Economic Matters
Unemployment Insurance - Work Sharing (Work Share Expansion Act of 2021)
This emergency bill expands applicability of work sharing within the unemployment
insurance (UI) program to include individuals who are rehired following a temporary
closure or layoff due to COVID-19, subject to federal guidance. The range of potential
work sharing plans is expanded to the maximum allowed under federal law. The bill also
requires the Maryland Department of Labor (MDL) to ensure that the work sharing
program has sufficient staff and resources to complete the processing of a complete
application within 10 days. MDL must send a related notice to employers within 30 days
of the bill’s effective date and must contract with a professional marketing and
communications firm for a work sharing program marketing campaign, as specified. The
bill authorizes various funding sources to cover the cost of the marketing campaign,
including Chapter 39 of 2021.
Fiscal Summary
State Effect: MDL can handle the bill’s requirements with existing budgeted resources,
as discussed below. Nonbudgeted Unemployment Insurance Trust Fund expenditures for
benefits paid are not materially affected. The bill does not otherwise materially affect State
finances.
Local Effect: The bill does not materially affect local government finances or operations.
Small Business Effect: Meaningful.
 Analysis
Bill Summary:
Expansion of Applicability and Possible Range of Plans
The definition of an “affected employee” for purposes of work sharing is expanded to
include an individual who is rehired following a temporary closure or layoff due to
COVID-19, subject to flexibility for noncontinuous employment provided under federal
guidance.
The allowable range of a work sharing plan is increased from its current range of 20% to
50% of normal weekly work hours to 10% to 60% (this is the maximum range permissible
under federal law).
Notification to Employers
Within 30 days after the bill takes effect, MDL must send a notice to all employers on
record as having paid UI taxes in the State during the immediately preceding year
informing them of their eligibility to participate in the work sharing UI program and
advising them how to contact MDL to participate.
Marketing Campaign
In order to further the goals of the work sharing program, MDL must contract with a
professional marketing and communications firm to develop and implement a marketing
campaign, as specified. The marketing campaign may be paid for using funding from
Chapter 39 of 2021, the federal government, or any other source. The campaign must
include:
 a comprehensive plan that uses the resources available through the myriad State
agencies to disperse information about the work sharing program;
 the development of materials, resources, tool kits, and advertisements that State
agencies should use to effectively disseminate information about the work sharing
program; and
 close cooperation between the marketing and communications firm, MDL, and the
Department of Information Technology to quickly develop a website that can be
updated in real time by either the firm or MDL to house all work sharing program
information.
SB 771/ Page 2
Current Law: The State has adopted an optional Short-Time Compensation Program,
more commonly known as work sharing, as allowed under federal law. Maryland
employers who participate in work sharing can retain employees by temporarily reducing
the hours of work, within a range of 20% to 50%, among employees within an affected
unit. Federal law is more permissive than State law in this case as the allowable federal
range is 10% to 60%. The employees with reduced work hours receive partial UI benefits
– the same percentage as the hourly reduction – to supplement lost wages. For example, an
employer could reduce hours by 20%, and then those affected employees would be entitled
to 80% of their normal earnings, plus 20% of their UI benefit.
Work sharing benefits were 100% federally funded under the federal Coronavirus Aid,
Relief, and Economic Security (CARES) Act through December 2020, which has been
extended twice through subsequent federal legislation. Work sharing benefits are now
federally funded through early September 2021. Work sharing recipients were eligible for
the full $600 federal add-on payment that was available under the CARES Act through
July 2020 and are eligible for the full current $300 add-on payment through early
September 2021.
For more general information on UI, see the Appendix – Unemployment Insurance.
State Fiscal Effect: Chapter 39 of 2021 authorizes $1.0 million in funding to MDL for a
work sharing marketing campaign. Assuming MDL uses those available funds, the bill
merely provides additional direction for their use and does not increase overall
expenditures. MDL can handle administrative changes to the work sharing program with
existing budgeted resources. If existing federal administrative funds are insufficient to
cover any associated outstanding expenses, additional above-base federal funding will be
provided, to the extent that those expenses are allowable, beginning in fiscal 2021.
Otherwise, general funds are needed to cover any outstanding costs.
Small Business Effect: Small businesses benefit from additional flexibility in allowable
work sharing programs. Work sharing allows businesses to retain employees during
periods of economic downturn, and, during periods with 100% federal reimbursement, the
related UI claims do not affect employer experience ratings. Also, additional claims will
not raise a particular employer’s taxes under Chapter 39 of 2021 for at least 2022 and 2023
(an employer’s 2021 taxes are not affected by this bill).
Additional Information
Prior Introductions: None.
SB 771/ Page 3
Designated Cross File: HB 1143 (Delegate Carey) - Economic Matters.
Information Source(s): Maryland Department of Labor; Department of Legislative
Services
Fiscal Note History: First Reader - February 23, 2021
rh/ljm Third Reader - March 24, 2021
Revised - Amendment(s) - March 24, 2021
Revised - Updated Information - March 24, 2021
Analysis by: Stephen M. Ross Direct Inquiries to:
(410) 946-5510
(301) 970-5510
SB 771/ Page 4
 Appendix – Unemployment Insurance
Program Overview
Unemployment Insurance (UI) provides temporary, partial wage replacement benefits of
up to $430 per week to individuals who are unemployed through no fault of their own and
who are willing to work, able to work, and actively seeking employment. Both the federal
and state governments have responsibilities for UI programs. Generally, funding for the
program is provided by employers through UI taxes paid to both the federal government
for administrative and other expenses and to the states for deposit in their UI trust funds.
Using federal tax revenues, the UI program is administered pursuant to state law by state
employees. The Maryland Department of Labor’s Division of Unemployment Insurance
administers the State’s UI program.
Each state law prescribes the tax structure, qualifying requirements, benefit levels, and
disqualification provisions. These laws must, however, conform to broad federal
guidelines.
Employer Contributions
Most Maryland employers pay State UI taxes, although State and local governments and
some nonprofit organizations reimburse the Unemployment Insurance Trust Fund (UITF)
for claims paid in lieu of paying taxes. Therefore, for most Maryland employers, the State
UI tax rate is a function of:
 the employer’s specific unemployment claims history; and
 the applicable tax table, which is based on the State’s UITF balance and applies to
most taxable employers.
Exhibit 1 shows the range of State UI taxes a typical employer owes based on the tax table
in effect; there are other rates for new employers and in other limited circumstances. State
UI taxes and reimbursements are typically due quarterly; however, Chapter 39 of 2021
allows employers with fewer than 50 employees to defer 2021 State UI tax payments or
reimbursements until January 31, 2022, and authorizes the Secretary of Labor to offer a
similar deferment in 2022. The Act, in conjunction with a recent executive order, also
generally prevents UI claims made during the COVID-19 pandemic from increasing an
employer’s taxes – although Table F, with its broadly higher rates, is in effect in 2021.
SB 771/ Page 5
 Exhibit 1
Tax Tables and Applicable Employer Tax Rates
As of Sept. 30, if the
Trust Fund Balance, Trust Fund
As a Percentage of Balance Then Next Year’s Tax Annual Tax Per Employee
Taxable Wages ($ in Millions) Rates Range from… (Rate x $8,500)
Tax No Single No Single
Table Exceeds Up to Exceeds Up to Claims Claim Up to Claims Claim Up to
A 5.00% N/A $995.8 N/A 0.30% 0.60% 7.50% $25.50 $51.00 $637.50
B 4.50% 5.00% 896.2 $995.8 0.60% 0.90% 9.00% 51.00 76.50 765.00
C 4.00% 4.50% 796.6 896.2 1.00% 1.50% 10.50% 85.00 127.50 892.50
D 3.50% 4.00% 697.1 796.6 1.40% 2.10% 11.80% 119.00 178.50 1,003.00
E 3.00% 3.50% 597.5 697.1 1.80% 2.60% 12.90% 153.00 221.00 1,096.50
F 0.00% 3.00% 0.0 597.5 2.20% 3.10% 13.50% 187.00 263.50 1,147.50
Notes: Fund balance threshold dollar amounts are based on the 2020 taxable wage base and are subject to change
each year. A “single claim” represents the tax rate applicable to the lowest possible rate associated with nonzero
(.0001 to .0027) benefit ratios. Taxes are applied to the first $8,500 earned by each employee, each year; compensation
less than that amount reduces taxes owed accordingly. Table F is in effect in 2021 and is likely to be in effect for at
least two more years; Table A had been in effect since 2016.
Source: Department of Legislative Services
Benefit Payments
Generally, the weekly benefit amount a claimant is eligible for is based on the quarterly
wages that the claimant was paid for covered employment in the calendar quarter of the
claimant’s base period in which those wages were highest. The base period is the first four
of the last five completed calendar quarters immediately preceding the start of the benefit
year, or, if the individual does not qualify under that definition, the four most recently
completed calendar quarters immediately preceding the start of the benefit year.
Weekly benefit amounts range from $50 to $430 per week, based on earnings in the base
period. There is also a dependent allowance of $8 per dependent, for up to five dependents,
although the allowance cannot raise the weekly benefit amount above $430. The first $50
of any wages earned by an individual receiving UI benefits in a given week is disregarded
for purposes of calculating the weekly benefit amount, after which the benefit payment is
reduced dollar for dollar. These amounts do not adjust for inflation. Generally, during a
benefit year, a claimant is entitled to 26 times the claimant’s weekly benefit amount.
During periods of high unemployment, extended benefits may also be available.
SB 771/ Page 6


Statutes affected:
Text - First - Unemployment Insurance - Work Sharing (Work Share Expansion Act of 2021): 81-201 Labor and Employment, 81-202 Labor and Employment, 81-202.1 Labor and Employment, 81-204 Labor and Employment
Text - Third - Unemployment Insurance - Work Sharing (Work Share Expansion Act of 2021): 81-201 Labor and Employment, 81-202 Labor and Employment, 81-202.1 Labor and Employment, 81-204 Labor and Employment