AN ACT TO AMEND TITLES 19, 29 AND 30 OF THE DELAWARE CODE RELATING TO COVID-19 RELATED UNEMPLOYMENT BENEFITS, ASSESSMENTS AND RULEMAKING AUTHORITY.

This bill provides COVID-19 related relief to both claimants receiving unemployment benefits and employers who are assessed unemployment taxes, and extends the end date of the Secretary of Labor’s COVID-19 related rulemaking authority. Section 1 exempts unemployment compensation benefits received in 2021 from the calculation of Delaware adjusted gross income so that unemployment claimants will not have to pay state taxes on the benefits they received during the continuation of the pandemic into 2021. This exemption was previously granted for 2020 state taxes. Section 2 holds the 2022 new employer assessment rate, average industry assessment rate and average construction industry assessment rate at the same rate as 2020 in order to avoid an increase in these rates as a result of the increase in unemployment claims due to COVID-19. Section 3 reduces the unemployment tax assessment rate for merit rated employers to the lowest of their earned rates for 2020, 2021 and 2022, in order to provide further tax relief for employers dealing with the economic effects of COVID-19, but does not provide this reduction for any employers who are paying the delinquency rate of assessment because of a failure to file quarterly assessment reports or failure to pay assessments. Section 3 also allows the Department the administrative authority to reduce employer assessment rates below the delinquency rate and provide responding credits, as necessary to correct administrative errors or address fraudulent claims charged to employers, except for employers who are charged the delinquency assessment rate because they have failed to file any quarterly tax report. Section 4 holds the taxable wage base at $14,500 for 2022, which will reduce the amount of wages on which employers pay unemployment tax assessments into the UI Trust Fund for 2022. The Department has determined that the impact of this change on the UI Trust Fund balance is estimated to be $11.4M in 2022. Sections 5 and 6 extend to December 31, 2022 the provision in HB 65, which authorized the Delaware Secretary of Labor to issue emergency rules amending the Delaware Unemployment Insurance Code to deal with the continuing effects of COVID-19 and implement federal programs providing unemployment benefits to respond to COVID-19.