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July 24, 2020
2020-1898

Maryland will not charge COVID-19 UI benefits to employer accounts

Maryland legislation (H1663) signed into law by Governor Larry Hogan establishes that individuals are not required to be separated from employment to be eligible for Maryland unemployment insurance (UI) benefits and that employers are prohibited from terminating an employee solely on the basis that the employee is isolated or quarantined due to COVID-19. The legislation also contains a fiscal note concerning the noncharging of employer accounts for COVID-19 UI benefits under existing law.

Eligibility for COVID-19 UI benefits

Individuals are entitled to UI benefits if they are not separated from employment if the following applies:

  • The individual's employer temporarily ceases operations due to COVID-19, preventing employees from coming to work.
  • The individual is quarantined due to COVID-19 with the expectation of returning to work after the quarantine is over.
  • The individual leaves employment due to a risk of exposure to or infection of COVID-19 or to care for a family member due to COVID-19.

These provisions are effective March 19, 2020 and expire on April 30, 2021.

Charging of COVID-19 UI benefits to employer accounts

There is no specific provision in H1663 concerning the charging of COVID-19 benefits to experienced-rated employer accounts; however, the fiscal notes to H1663 state that under Chapter 733 of 2017 (codified in MD Code Section 8-611) the Secretary of Labor is authorized to waive the benefit charges against the earned rating record of an experienced-rated employer if:

  • The benefits are paid to the claimant during a period in which the claimant is temporarily unemployed because the employer shut down due to a natural disaster.
  • The Governor declared a state of emergency due to the natural disaster.

If the Secretary of Labor waives the benefit charges under Chapter 733, the waiver may only be in effect until four months after the natural disaster or the date the employer reopens, whichever is earlier.

The fiscal notes state that the Maryland Department of Labor (DOL) advised that Chapter 733 applies to the current COVID-19 emergency. Accordingly, the provision of not charging experienced-rated employers with COVID-19 UI benefits is effective starting with the date of the governor's emergency order, or March 5, 2020, and ending the earlier of July 5, 2020, or the date the employer reopens.

As of the date of this Alert, the DOL's frequently asked questions (FAQs) do not include information concerning the extent that employer UI accounts will be charged for COVID-19 UI benefits. Pursuant to this vital matter, it is hoped that the DOL will soon confirm and clarify.

For more information about Maryland's COVID-19 UI benefits, go here.

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Contact Information
For additional information concerning this Alert, please contact:
 
Workforce Tax Services - Employment Tax Advisory Services
   • Kenneth Hausser (kenneth.hausser@ey.com)
   • Debera Salam (debera.salam@ey.com)
   • Kristie Lowery (kristie.lowery@ey.com)
   • Peter Berard (peter.berard@ey.com)

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