The Massachusetts Division Of Unemployment Assistance Issues Proposed Regulations Implementing EMAC Hardship Waivers

Responding to widespread resistance—principally on the part of small businesses—to the increase in the Employer Medical Assistance Contribution ("EMAC") contributions and the addition of an EMAC supplemental contribution, Massachusetts lawmakers amended the EMAC rules in 2017 to add hardship waiver provisions. (Click here for a summary of the EMAC rules.) The Massachusetts Division of Unemployment Assistance (DUA) recently issued a proposed regulation implementing the hardship waiver rules. This post examines those proposed regulations.

Background

Chapter 63 of the Acts of 2017 amended M.G.L. c.149, § 189A to allow employers to submit an application for an EMAC hardship waiver. In determining whether a hardship existed, the statute permitted the DUA to "give special consideration" to the following classes of employers:

Employers with variable or limited revenue; Employers with fewer than 50 employees; Employers whose employees are mostly seasonal or temporary; Employers that serve the public interest by providing human services or long-term care services and that receive a significant share of revenues from governmental programs. The DUA issued its proposed regulation in response to this legislative mandate. Predictably, the waiver process requires an employer to complete an application that includes "sufficient supporting documentation" to justify the need for a waiver. Waivers relate to a specific calendar quarter, and there are no appeal rights, other than to the courts. Hardship waiver requests must be received during the first two weeks of each filing period (e.g., Q3 applications would be due by Friday, October 12th).

Hardship Standards

The standard for determining whether to grant a hardship waiver is set out in Proposed 430 CMR 21.11, which provides, in relevant part:

The Director may grant a full or partial waiver of liability for the EMAC Supplement upon a determination that an applicant has proven a financial hardship. Where an employer is assessed an Employer Shared Responsibility Payment and an EMAC Supplement in the same calendar year, the Director may find that the employer is eligible for a hardship waiver. Applicants shall be notified of the Director's decision prior to the date upon which payment of the EMAC Supplement is due.

The term "financial hardship" is defined to mean:

A showing by the employer that, (1) because of financial hardship, the employer is unable to pay the EMAC Supplement; (2) the employer has acted in...