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Session over, business community breathes a sigh of relief

Sen. Stephen Hershey sponsored legislation to cushion the impact of the pandemic on the state’s unemployment trust fund and what employers pay into the fund. (The Daily Record/File Photo)

Sen. Stephen Hershey sponsored legislation to cushion the impact of the pandemic on the state’s unemployment trust fund and what employers pay into the fund. (The Daily Record/File Photo)

With a few notable exceptions, business owners in Maryland — especially small businesses and the hospitality industry, which was decimated nationwide by the coronavirus pandemic — are breathing a sigh of relief following the General Assembly session that concluded Monday.

The business community’s first major win came within the session’s first month, when businesses received over a billion dollars in tax relief and stimulus and provided grants for small businesses and nonprofits through the RELIEF Act.

Aside from that relief, the Maryland business community had two top priorities for the legislative session, both of which were preventive measures. First, the business community hoped to avoid massive increases to business owner’s unemployment insurance taxes, which contribute to the fund that is used to pay unemployment benefits.

In addition to looking to federal funds to refill the unemployment insurance trust fund, the business community also sought legislation that would prevent that rate from increasing dramatically over the course of just one year — as was anticipated to happen as the fund was drained due to pandemic layoffs.

Thanks to low rates of unemployment in Maryland, business owners had been paying low unemployment insurance tax rates for years, before suddenly jumping into the highest rate — a 733% increase for some businesses — in 2021.

Gov. Larry Hogan’s allocation of $1.1 billion of federal funds given to the state through the American Rescue Plan Act into the trust fund, and a bill, sponsored by Sen. Stephen Hershey, R-Caroline, Cecil, Kent and Queen Anne’s, aim to lessen the blow of that increase in coming years.

Signed by the governor on Tuesday after passing unanimously through both chambers, Hershey’s legislation will make it so that the governor must again allocate federal funds to the trust fund in fiscal year 2022. The amount that must be allocated will supplement the fund enough that business owners’ tax rates will be set at the third-lowest rate (out of a possible six) for that year.

“The COVID-19 pandemic caused unforeseeable stress on our state’s unemployment insurance system,” said Mike O’Halloran, the Maryland director of the National Federation of Small Businesses. “However, thanks to the actions of Governor Hogan and legislative leaders, Maryland small businesses will not be left on their own to pick up the tab of replenishing the trust fund.”

The community’s other main priority, which would have protected businesses who are following state, local and federal COVID-19 guidance against civil claims from customers who believe they caught the virus at that business.

Though business owners were highly concerned about the possibility of these lawsuits at the start of the session, few came to pass, none of which were in Maryland, according to data collected by Richmond law firm Hunton Andrews Kurth.

So, business leaders were disappointed, if not particularly worried, when the bill to provide the liability shield sponsored in the Senate by Sen. Christopher West, R-Baltimore County, and in the House by Del. Dalya Attar, D-Baltimore, failed to move past initial committee hearings.

Business leaders also praised the legislature for preventing employers from being hit with new taxes and expenses.

The Maryland Essential Workers’ Protection Act, a robust measure that aimed to provide hazard pay, additional time off for sick leave and bereavement, and other benefits to frontline workers amid emergencies, was stripped down significantly at the encouragement of business organizations.

The hazard pay provision, which would have required business owners to pay workers an extra $3 an hour during an emergency, was removed entirely, while additional sick leave will be required only if federal or state grants are available cover the cost.

 

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