The Massachusetts DET, now a division of the state’s Department of Labor and Workforce Development, administers the Commonwealth’s unemployment insurance compensation program. The DET levies a tax on every employer covered under the Employment Security Act. The tax rate is based on how many employees the employer has employed and discharged in the past year; this amount is called the experience rating.
The experience rating was originally designed to encourage employing units to keep people on the payroll. One consequence, however, is that when an employee leaves, the employer may advocate that the claimant be denied unemployment benefits in order to keep its experience rating low. Certain nonprofit and government employers can opt out of paying these taxes and reimburse DET for any benefits paid to their former employees. Sometimes these employers contest claims even harder than employers who pay the taxes, because they have to reimburse UI payments on a dollar for dollar basis.
The DET performs a wide range of unemployment-related functions, including
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determining and collecting employer contributions,
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processing claims for UI,
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establishing eligibility for UI,
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job search and retraining services, and
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administering health insurance for the unemployed.
The DET’s administrative costs are funded by the residual amount of federal taxes that employers pay directly to the federal government after receiving a credit for state contributions.
Produced by Monica Halas and Allan Rodgers Created February, 2000
