Baker Signs Bill Addressing COVID Leave, Unemployment System Finances

Gov. Charlie Baker on Thursday signed the bill authorizing $7 billion in borrowing to stabilize the unemployment insurance system, establishing a paid sick leave program for COVID-19 emergencies, and reducing the size of premium increases employers face to fund the jobless benefits system. The governor also returned sections of the bill with amendments.

The bill contains language already approved at the federal level to exclude $10,200 of unemployment compensation received by certain individuals with lower incomes in 2020 and 2021 from state taxes, a change the Department of Revenue will have to wrestle with for people who have already filed returns for 2020.

The new law also ensures that, for tax purposes, forgiven Paycheck Protection Program loans and Economic Injury Disaster Loan advances are excluded from gross income, regardless of how businesses are organized. The programs were set up to help businesses function and retain employees during the pandemic.

Under the new law, employees are eligible for up to five days of paid leave under a program that Baker said is similar to a federal COVID paid leave program and applies to "employees who are sick with, isolated or quarantined due to COVID, or are securing immunization, or caring for family members in the same circumstances."

"This will ensure that employees and their families are provided necessary protections from the spread of COVID-19 and it is a goal that I support," Baker wrote in a letter to the House and Senate.

In his amendment, Baker asked legislators to strike and replace five sections of the bill dealing with its sick leave provisions, saying his amendments "will simplify implementation for employers and provide increased certainty for employees."

In addition to increases in annual premiums, the bill includes an unemployment insurance surcharge that businesses will need to pay to help repay interest on federal loans the state needed to keep its jobless benefits fund solvent in the face of a surge in claims last year.