Explainer: Who gets MN ‘hero pay’ and how unemployment tax hike will be returned to businesses

Christopher Magan, Pioneer Press
·2 min read

Everyone from doctors to janitors who worked on the pandemic front line will get $750 of “hero pay” and an unpopular unemployment insurance tax hike was reversed under last week’s deal at the Minnesota Legislature.

About 667,000 workers are eligible to apply for hero pay, and businesses will get a credit or refund of a roughly 30 percent increase in unemployment taxes that were due April 30. Gov. Tim Walz signed the bipartisan bill immediately after it was sent to him April 28 by the Legislature.

The agreement takes about $3.3 million from the state’s $9.25 billion budget surplus and $1.2 billion in unspent federal coronavirus aid. Here’s where the money goes:

BONUSES FOR WORKERS

Frontline workers will share $500 million in hero pay — double what lawmakers agreed upon last year. They’ll have 45 days to apply for $750 checks once the state Department of Labor and Industry launches a website.

Who is eligible: Health, long-term, home and child care workers; government workers and first responders; educators; manufacturers; food, grocery and retail employees; delivery drivers and transit workers; security, maintenance and housing personnel are all listed in the legislation.

Hour requirements: Applicants in eligible categories must have worked at least 120 hours between March 15, 2020, and June 30, 2021. They must have worked in proximity to people outside their household and cannot have received more than 20 weeks’ worth of unemployment.

Income limits: Medical workers who cared for COVID-19 patients and who earn less than $175,000 a year, $350,000 for couples, can apply. Other workers must have an annual income under $85,000, or less than $185,000 for joint filers.

How to apply: Once the state Department of Labor and Industry launches its website, workers have 45 days to apply. There are 15 days to appeal denied claims.

When will checks arrive: The $750 should be distributed by summer. Checks could be larger, as much as $1,500, if fewer people apply.

TAX BREAKS FOR BUSINESSES

The legislation repays the state’s $1.4 billion unemployment insurance trust fund debt and adds $1.3 billon to bring the account back to near pre-pandemic levels. Unemployment tax hikes as high as 30 percent are erased under the plan.

Returned funds: The first round of increased unemployment taxes were due April 30. Businesses that paid the higher rate can ask for a refund or there will be an automatic credit from the state Department of Employment and Economic Development.

Recalculated rates: State officials are working to recalculate unemployment tax rates for 130,000 employers. New rates will be listed on employers’ online unemployment insurance accounts.

Other changes: The bill lowers the base unemployment insurance tax rate from 0.5 percent to 0.1 percent. It eliminates 2022 special assessments and federal interest charges.

The legislation did not include House Democrats’ request to make certain hourly school employees eligible for unemployment insurance.

Related Articles