Description of existing policies relevant to the rule, new policies proposed to be included in the rule, and an analysis of policy alternatives:
Currently, unemployment benefits are charged to employer accounts unless a statutory exception applies. 2019 Act 185 directs the Department to charge the benefits for initial claims related to the public health emergency declared on March 12, 2020, by Executive Order 72 to the balancing account or the interest and penalties appropriation. An employer’s contribution rate on the employer’s payroll for a given calendar year is based on the reserve percentage of the employer’s account as of the applicable computation date, which is June 30 of each year. Ultimately, however, the employer’s reserve fund balance takes into account all charges and credits on a rolling basis so that the employer’s unemployment experience determines the contribution rate.
The new policy to be included in this rule will ensure that employers’ contribution rates for 2022 are correctly calculated as of June 30, 2021, while meeting the policy goals of 2019 Act 185. The new policy in this rule will also assist the Department to meet the requirements of 2019 Act 185 more timely for reimbursable employers. The rule will also provide instructions for employers who seek relief of charges due to the public health emergency. The policy alternative is to do nothing, which could negatively impact many employers subject to contribution financing because their contribution rates might be higher for 2022 than they should be. For most employers subject to contribution financing, this would result in higher contribution rates for 2022, which would not be in accordance with the legislative intent of 2019 Act 185. Doing nothing is unacceptable because this rule can protect employers from unnecessarily high contribution rates. Statutory authority for the rule, including the statutory citation and language:
The Department has statutory authority for the proposed rule.
“The department may adopt and enforce all rules which it finds necessary or suitable to carry out this chapter.” Section 108.14 (2), Stats. Estimate of the amount of time that state employees will spend developing the rule and other resources necessary to develop the rule:
The estimated time is 80 hours.
Description of all entities that may be affected by the proposed rule:
Employers subject to the unemployment insurance law whose employees filed initial claims that relate to the public health emergency declared on March 12, 2020, by Executive Order 72.
Summary and preliminary comparison with any existing or proposed federal regulation that is intended to address the activities to be regulated by the proposed rule:
State law must to conform to and substantially comply with federal regulations. See 20 CFR § 601.5. Anticipated economic impact of implementing the rule (note if the rule is likely to have an economic impact on small businesses):
The proposed rule is expected to have an economic impact on employers subject to the unemployment insurance law, which may include small businesses, because employers must submit information to the Department to receive charging relief under 2019 Act 185.
