HB 542-FN - AS INTRODUCED

2025 SESSION

25-0379

05/06

HOUSE BILL 542-FN

AN ACT relative to weekly benefit amounts for unemployment compensation.

SPONSORS: Rep. MacKenzie, Hills. 40; Sen. Long, Dist 20; Sen. Perkins Kwoka, Dist 21

COMMITTEE: Labor, Industrial and Rehabilitative Services

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ANALYSIS

This bill updates the weekly benefit amount for total unemployment and the maximum total amount of benefits payable during any benefit year.

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Explanation: Matter added to current law appears in bold italics.

Matter removed from current law appears [in brackets and struckthrough.]

Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.

25-0379

05/06

STATE OF NEW HAMPSHIRE

In the Year of Our Lord Two Thousand Twenty Five

AN ACT relative to weekly benefit amounts for unemployment compensation.

Be it Enacted by the Senate and House of Representatives in General Court convened:

1  Unemployment Compensation; Weekly Benefit Amount; Maximum Total Amount of Benefits.  RSA 282-A:25 is repealed and reenacted to read as follows:

282-A:25  Weekly Benefit Amount for Total Unemployment and Maximum Total Amount of Benefits Payable During any Benefit Year.  The maximum weekly benefit amount and maximum benefits payable to an eligible individual, whose benefit year begins on or after the effective date of this section, shall be determined by the individual's annual earnings.  In each of 2 calendar quarters, the individual must have earned not less than $1,400, as follows:

Annual Earnings of Maximum Weekly

Not Less Than Benefit Amount Maximum Benefits

$2,800 32 $832

3100 35 910

3400 39 1014

3900 45 1170

4200 48 1248

4500 52 1352

4800 55 1430

5100 59 1534

5600 64 1664

6100 69 1794

6600 75 1950

7000 80 2080

7400 83 2158

7800 88 2288

8200 92 2392

8600 96 2496

9000 101 2626

9500 105 2730

10000 110 2860

10500 115 2990

11000 120 3120

11500 126 3276

12500 137 3562

13500 148 3848

14500 159 4134

15500 167 4342

16500 178 4628

17500 188 4888

18500 199 5174

19500 206 5356

20500 217 5642

21500 227 5902

22500 238 6188

23500 249 6474

24500 254 6604

25500 265 6890

26500 275 7150

27500 286 7436

28500 290 7540

29500 301 7826

30500 311 8086

31500 321 8346

32500 331 8606

33500 342 8892

34500 352 9152

35500 362 9412

36500 372 9672

37500 383 9958

38500 394 10244

39500 405 10530

40500 416 10816

41500 427 11102

42500 437 11362

44500 458 11908

46500 478 12428

48500 499 12974

50000 514 13364

52000 535 13910

54000 556 14456

56000 576 14976

58000 597 15522

60000 617 16042

62500 643 16718

65000 669 17394

2  Effective Date.  This act shall take effect 60 days after its passage.

LBA

25-0379

Revised 2/4/25

HB 542-FN- FISCAL NOTE

AS INTRODUCED

AN ACT relative to weekly benefit amounts for unemployment compensation.

FISCAL IMPACT:   This bill does not provide funding, nor does it authorize new positions.

METHODOLOGY:

This bill updates the weekly benefit amount for total unemployment and the maximum total amount of benefits payable during any benefit year.

The Department of Employment Security indicates the bill would amend the table at RSA 282-A:25 by adding 12 new weekly benefit amounts along with associated new annual earnings increments to the existing table.  The new benefits would range from a $437 weekly benefit amount for someone earning not less than $42,500 in their four-quarter base period preceding the filing for unemployment benefits to a $669 weekly benefit amount for someone earning not less than $65,000.  As a result some claimants would see an increase in their unemployment compensation benefit amounts.  Currently, any claimant eligible for benefits earning of at least $41,500 in their base period, qualifies for a weekly benefit of $427.  This has been the maximum weekly benefit amount in New Hampshire since 2007.  The Department provided the following information:

• During calendar year 2023, there were 11,407 individuals paid UC benefits and 6,588, or 58%, qualified for and were paid the $427 maximum weekly benefit amount.  The average base period earnings for claimants qualifying for the $427 benefit in 2023 was $86,359.  This weekly benefit of $427 represented a 26% wage replacement rate for these individuals.
• If this bill had been in place for calendar year 2023, total UC benefit payments would have increased by $10,015,774, or 28%, going from $35,846,856 to $45,862,630.

• In calendar year 2024, there were 13,112 individuals that were paid UC benefits and 8,425, or 64% of them, qualified for and were paid the $427 maximum weekly benefit amount.  The average base period earnings for claimants qualifying for $427 in 2024 was $88,563.  The weekly benefit amount of $427 represented a 25% wage replacement rate for these individuals.

• If the bill had been in effect for calendar year 2024, total UC benefit payments would have increased by $14,678,438, or 31%, going from $47,272,629 to $61,951,067.    

The Department indicates the bill would impact New Hampshire employers in the following ways.

• The first relates to UC benefits paid to employees of “reimbursable” employers who will have to reimburse the Unemployment Compensation Trust Fund (the Trust Fund) dollar for dollar for benefits paid.  The State and all county and municipal entities (except those that elect pay quarterly taxes) are “reimbursable employers.”  Instead of paying quarterly taxes, the State, and other political subdivisions, pay into the Trust Fund an amount equivalent to the amount of UC benefits paid to claimants during their benefit year proportional to the wages in the base period that were paid by these political entities.  The proposed increase in benefit payments to individuals in the table at RSA 282-A:25 will directly affect these reimbursable entities in their capacity as employers by each additional dollar of benefits paid.

• The second potential fiscal impact relates to employer tax rates.  All for-profit employers are treated as taxable employers and are required to pay quarterly contributions to the Trust Fund based upon an earned tax rate applied against a fixed taxable wage base per employee of $14,000 in annual wages.  The earned tax rate is set by statutory tax tables, but the determination of where an employer fits within the tables is based upon a risk assessment of each employer which compares total taxes paid by the employer against total benefits paid by the Department to the employer’s former employees, all compared against current total annual wages paid.  The less benefits paid to an employer’s former employees and more in taxes previously paid results in a lower earned tax rate.  The more benefits paid to an employer’s former employees results in a higher earned tax rate. An increase in the amount of UC benefits paid, could then cause a corresponding increase in employer earned tax rates, thus increasing the amount of unemployment taxes paid by taxpaying employers.

• A third potential fiscal impact to employer tax rates involves the statutory solvency triggers that determine when employer tax rates are decreased as the balance in the Trust Fund reaches certain milestones.  Currently, new employers start out with an earned tax rate of 2.7%.  The current statutory solvency triggers cause a reduction of 0.5% to the earned tax rates of all positive rated employers if the Trust Fund balance equals or exceeds $250 million for an entire calendar quarter.  If the Trust Fund balance equals or exceeds $350 million for an entire calendar quarter, then positive rated employers receive a reduction of 1.0% to their earned tax rate.  Finally, if the Trust Fund balance equals or exceeds $400 million for every day of an entire calendar quarter, the positive rated employers receive a reduction of 1.5% to their earned tax rate.  These reductions are referred to as Fund Balance Reductions (FBRs).  

The current FBR in effect is 1.0% as the Trust Fund is currently at about $390 million and has equaled or exceeded $350 million but has not equaled or exceeded $400 million.  The impact on the new employer starting at an earned tax rate of 2.7% would be a reduction to 1.7%.  Again, it is this earned tax rate at which the employer’s tax obligation is determined as applied to the first $14,000 in annual wages paid per employee.  This new employer would pay $238 per year per employee according to the current FBR in effect.  The potential impact of the proposed legislation would be felt if benefit amounts were to be increased.  Then disbursements from the Trust Fund would increase.  As disbursements from the Trust Fund increase, the balance of the Trust Fund would fall, making it harder and less likely to meet the balance thresholds triggering FBRs to reduce employer tax rates.  

The Department states the currently, tax paying employers that are beyond their first anniversary date, pay at an average tax rate of 0.61%.  This represents a UC tax of $85 per employee per year.  This average tax rate is as low an average tax rate as paid by New Hampshire employers going back 30 years and is currently the lowest UC tax burden in the northeast and the 3rd lowest UC tax burden in the country.

In order to gauge the possible impact of this proposal on future years and not just look at what the impact would have been on prior years, economists within the Department’s Economic and Labor Market Information Bureau (ELMI) are preparing projections for the performance of the UC Trust Fund during economic downturns of various degrees to gauge how the Trust Fund would perform under the proposal and whether the Trust Fund would remain solvent.  The Department will model these “stress test” scenarios using the modest recession from the early 2000s when the New Hampshire unemployment rate peaked at 4.5% and will also model the Trust Fund using a more severe economic downturn like that experienced during the Great Recession when New Hampshire’s unemployment rate peaked at 6.5%.  The Department will provide the results of this modeling as soon as it is available.

It is assumed that any fiscal impact would occur after FY 2025.

AGENCIES CONTACTED:

Department of Employment Security