Governor’s Order Protects Employers From Unemployment Insurance Increase

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Gov. Asa Hutchinson signed an executive order on Dec. 29 that provides relief to employers by excluding unemployment claims during the second quarter of 2020 in the calculation of employer UI tax rates.

Arkansas Business in June covered the pandemic’s potential to empty the state’s unemployment fund and trigger an across-the-board increase in employers’ contribution rates, as well as legislation that was being drafted to help those who employers who were impacted by state-mandated, coronavirus-related shutdowns.

“Keeping our businesses open and our economy thriving is a priority as we navigate through this season of uncertainty,” Hutchinson said Thursday in a news release. “I signed the executive order to help provide relief to Arkansas employers who have been hit hard during the pandemic and I look forward to working with our legislature to establish a solution to mitigate COVID-19 related charges beyond the second quarter of 2020.”

Secretary of Commerce Mike Preston said the second quarter saw the highest level of unemployment for Arkansans during the pandemic.

“This action avoids a catastrophic increase in UI rates for employers already struggling with the effects of the pandemic,” Preston said. “We are grateful that members of the legislature have expressed an interest in making statutory changes in the upcoming session to ensure this relief extends beyond the end of the pandemic.”

Several elected state officials praised the measure. State Rep. Jack Ladyman, R-Jonesboro, said that, without the order, “hundreds of small businesses in Arkansas would be devastated and possibly forced to close. I have committed to be the primary sponsor of a bill, to be presented in the 93rd General Assembly, to make this solution permanent.”

The Division of Workforce Services is set to begin notifying employers of their 2021 tax rates. Statements will be distributed as soon as possible, state officials said.