Massachusetts Announces Unemployment Insurance Settlement with USDOL

The Healey-Driscoll Administration and the United States Department of Labor (USDOL) have reached a $2.1 billion settlement to be paid over 10 years regarding an inherited liability to the state’s Unemployment Insurance Trust Fund (UITF) stemming from an improper overdraw of federal pandemic unemployment benefits during the pandemic.

This settlement agreement reflects the outcome of the Healey-Driscoll administration partnering with federal partners to determine Massachusetts’ total liability and bring this to resolution. Without this intervention, the potential total liability, including fees, penalties, and back interest, could have exceeded $3 billion. The administration was also able to establish a 10-year repayment timeline, which will spread out payments and reduce the burden on Massachusetts. Additionally, the Executive Office of Labor and Workforce Development (EOLWD) and the Massachusetts Department of Unemployment Assistance (DUA) have implemented enhanced internal controls and processes.

Moving forward, this agreement presents an opportunity to pursue UI reform as the administration monitors the monthly reporting and projections of the UITF, recognizing the need to ensure solvency by 2028. The Secretaries of Administration & Finance and Labor & Workforce Development will co-lead a comprehensive review of the solvency of UI and assess potential reforms with stakeholders and with the goal of identifying proposed UI reform recommendations to the Governor.

While the administration’s settlement agreement with USDOL will not impact businesses in the short term, the administration recognizes the community will have questions and has prepared the below FAQ to provide more background for employers.

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