SB 818
Department of Legislative Services
Maryland General Assembly
2021 Session
FISCAL AND POLICY NOTE
Third Reader - Revised
Senate Bill 818 (Senator Klausmeier)(Chair, Joint Committee on
Unemployment Insurance Oversight)
Finance Economic Matters
Unemployment Insurance – Maryland Department of Labor – Accountability
and Oversight
This emergency bill requires the Maryland Department of Labor (MDL) to post specified
information related to the State’s unemployment insurance (UI) program on its website on
a weekly and monthly basis. The bill also establishes actions MDL must take and exempts
the department from specified laws related to staffing in the event of a disaster, as
described. The assistant secretary for the Division of Unemployment Insurance (DUI) must
oversee compliance with the disaster-related requirements.
Fiscal Summary
State Effect: MDL can generally handle the bill’s requirements with existing budgeted
resources, as discussed further below. Nonbudgeted Unemployment Insurance Trust Fund
(UITF) revenues and expenditures are not affected.
Local Effect: None.
Small Business Effect: Minimal.
 Analysis
Bill Summary:
Ongoing Reporting Requirements
Each month, MDL must post on its website a report on the administration and operation of
the State’s UI program during the immediately preceding month. The report must include:
 a balance sheet for UITF;
 the number of claims for UI benefits filed in the immediately preceding month;
 the number of claims pending adjudication and the number of claims pending
adjudication that were resolved since the immediately preceding month;
 the number of final determinations that were made in the immediately preceding
month; and
 the number of claims processed by MDL during the immediately preceding month.
Once per week, MDL must post on its website a weekly report that includes the number of
(1) open claims; (2) claims pending adjudication; (3) claims for which the first payment
has not been made within 21 days after the week ending date of the first compensable week
in the benefit year; (4) claims closed; (5) claims resolved by adjudication; and (6) claims
for which the claimant encountered technological problems with the online portal. MDL
must retain the information on its website for at least the eight immediately preceding
weeks.
Disaster Response Requirements
MDL must monitor UITF for a disaster, which – for purposes of the bill – is when, for
four consecutive weeks, MDL fails to pay at least 82% of first payments within 21 days
after the week ending date of the first compensable week in the benefit year.
When the assistant secretary of DUI determines that there is a disaster, MDL must submit
a disaster report to the Presiding Officers, the Senate Finance Committee, and the
House Economic Matters Committee within 7 days after the disaster determination and
every 30 days thereafter while the disaster is ongoing. The report must include:
 the UITF balance immediately preceding the disaster determination and the current
UITF balance;
 MDL’s anticipated office staffing needs over the next 30, 60, and 90 days;
 MDL’s plan for meeting staffing needs; and
 an update on federal funding and support for UITF.
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The disaster reporting requirements must remain in effect until MDL, for four consecutive
weeks, is paying at least 87% of first payments within 21 days, as specified.
During a disaster, MDL is exempt from requirements under the State Finance and
Procurement Article for staffing, and MDL must hire additional full-time or part-time staff
who are State employees, contractual employees, or individuals under contract with a
third-party vendor to respond to issues raised by claimants and employers. During a
disaster, the assistant secretary must oversee compliance with these requirements.
Current Law: The Secretary of Labor must submit an annual report on the UI program
to the Governor by January 1 each year. The annual report must include:
 a balance sheet for UITF;
 a table that shows the amount of any benefit that was ineffectively charged or not
charged to the experience rating record of an employer;
 the reason for not charging the amount of any benefit to the experience rating record
of an employer;
 by category of disqualification, the amount of any benefit that was paid after a
disqualification for specified reasons; and
 any recommendation for an amendment to the UI statute that the Secretary considers
proper.
For more information on the State’s UI program, see the Appendix – Unemployment
Insurance.
State Fiscal Effect: MDL can likely meet the ongoing reporting requirements with
existing budgeted resources, which includes a $15,000 information technology expense
associated with tracking benefit payment timeliness on a weekly basis.
Historically, MDL has only dropped below the 82% first payment timeliness disaster
threshold specified in the bill during major recessions and has not stayed below that
threshold for any significant period of time except for during the COVID-19 pandemic.
The most recent available data shows 21-day first-payment timeliness of 64.3% as of
January 31, 2021, and 49.5% as of February 28, 2021. As such, upon the effective date of
the bill, MDL is likely required to meet additional reporting requirements and hire
additional full-time or part-time staff who are State employees, contractual employees, or
individuals under contract with a third-party vendor to respond to issues raised by claimants
and employers.
The hiring of additional staff has occurred in the absence of the bill and would likely occur
during future disaster periods in the absence of the bill; as such, these requirements likely
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do not increase administrative spending for the department. For example, MDL advises
that it has sought additional staffing support through third-party vendors, in addition to
hiring new staff, reassigning current staff, and rehiring retirees in response to
unprecedented UI claims due to the COVID-19 pandemic. More information on several of
those contracts can be found beginning on page 33 of the February 24, 2021 Board of
Public Works agenda.
Nevertheless, if existing federal administrative funds are insufficient to cover expenses
associated with the bill, additional above-base federal funding will be provided, assuming
that the expenses are allowable. Otherwise, general funds are needed to cover those costs.
Additional Information
Prior Introductions: None.
Designated Cross File: HB 1138 (Delegate Carey) - Economic Matters.
Information Source(s): Maryland Department of Labor; U.S. Department of Labor;
Department of Legislative Services
Fiscal Note History: First Reader - February 23, 2021
rh/ljm Third Reader - March 25, 2021
Revised - Amendment(s) - March 25, 2021
Analysis by: Stephen M. Ross Direct Inquiries to:
(410) 946-5510
(301) 970-5510
SB 818/ 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.
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 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.
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Statutes affected:
Text - First - Unemployment Insurance – Maryland Department of Labor – Accountability and Oversight: 8-101 Labor and Employment, 8-311 Labor and Employment, 8-311.1 Labor and Employment, 21-257 Labor and Employment, 8-311.2 Labor and Employment
Text - Third - Unemployment Insurance – Maryland Department of Labor – Accountability and Oversight: 8-101 Labor and Employment, 8-311 Labor and Employment, 8-311.1 Labor and Employment, 21-257 Labor and Employment, 8-311.2 Labor and Employment, 81-103 Labor and Employment