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July 29, 2020
2020-1925

Tennessee won't charge employer accounts for COVID-19 UI benefits through July 31, 2020

Tennessee Department of Labor and Workforce Development Commissioner announced that, retroactive to March 15, 2020 and through July 31, 2020, employers will not be charged for COVID-19 UI benefits.

The change is the result of enactment of SB 2520 (Chapter 745), which also codifies the waiver of the one-week waiting period for COVID-19 UI benefits contained in Executive Order 15.

Section 2 of the bill provides for the noncharge of COVID-19 UI benefits is repealed on January 1, 2021; however, the Department announced it will begin charging employer accounts after July 31, 2020.

Work-search requirements and one-week waiting period waived under executive orders for workers filing COVID-19 UI benefit claims

Executive Order 15, issued by Tennessee Governor Bill Lee on March 19, 2020, waived work-search requirements for individuals affected by COVID-19. Executive Order 36 waived the one-week waiting period and continued the waiver of the work-search requirements. These provisions are extended through August 29, 2020 under Executive Order 50.

Employers must report employees who refuse to return to work

According to the Department's FAQs for employers, employers should electronically report workers who refuse to return to work here. Refusing to return to work is generally a disqualifying circumstance and will keep workers from collecting further UI benefits. Certain limited COVID-19-related exceptions may allow workers to refuse to return to work and continue to collect UI benefits.

For more information on the Department's response to COVID-19, go here.

Ernst & Young LLP insights

Because the legislation is retroactive, employers should review benefit charge statements to confirm the Department has removed UI benefit charges related to COVID-19 from their experience account.

Tennessee is one of four states (New Hampshire, New Jersey, Tennessee and Vermont) that assign SUI tax rates on a fiscal-year, rather than calendar-year, basis. As a result, new tax-rate calculations take effect as of July 1, 2020 and are effective through June 30, 2021, though rates may change as of January 1, 2020 if the size of the SUI trust fund as of December 31, 2020 falls low enough to move to a new rate schedule.

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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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