EXPLANATION: CAPITALS INDICATE MAT TER ADDED TO EXISTIN G LAW.
[Brackets] indicate matter deleted from existing law.
*hb0554*
HOUSE BILL 554
K2 5lr2051
CF 5lr2118
By: Delegate Charkoudian
Introduced and read first time: January 22, 2025
Assigned to: Economic Matters
A BILL ENTITLED
AN ACT concerning 1
Unemployment Insurance Modernization Act of 2025 2
FOR the purpose of repealing and establishing the methodology used to calculate the 3
weekly benefit amount; altering the taxable wage base used to determine employer 4
contributions to the Unemployment Insurance Trust Fund, the dependent allowance, 5
and the amount of earned wages subtracted from a weekly benefit amount; requiring 6
the Maryland Department of Labor, on or before a certain date each year, to 7
determine and make available online the State annual average wage applicable to 8
the rate of contribution; requiring the Secretary of Labor to set the taxable wage base 9
and the maximum weekly benefit amount in a certain manner for certain years; and 10
generally relating to unemployment insurance. 11
BY repealing 12
Article – Labor and Employment 13
Section 8–803 14
Annotated Code of Maryland 15
(2016 Replacement Volume and 2024 Supplement) 16
BY repealing and reenacting, with amendments, 17
Article – Labor and Employment 18
Section 8–607(b), (c), and (d)(1) and 8–804 19
Annotated Code of Maryland 20
(2016 Replacement Volume and 2024 Supplement) 21
BY adding to 22
Article – Labor and Employment 23
Section 8–803 24
Annotated Code of Maryland 25
(2016 Replacement Volume and 2024 Supplement) 26
SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF MARYLAND, 27 2 HOUSE BILL 554
That Section(s) 8–803 of Article – Labor and Employment of the Annotated Code of 1
Maryland be repealed. 2
SECTION 2. AND BE IT FURTHER ENACTED, That the Laws of Maryland read 3
as follows: 4
Article – Labor and Employment 5
8–607. 6
(b) (1) Subject to paragraph (2) of this subsection, the taxable wage base is the 7
[first $8,500 in wages] AMOUNT SET UNDER SUB SECTION (C)(3) OF THIS SECTION that: 8
(i) an employing unit pays to each employee for covered employment 9
during a calendar year; 10
(ii) an employing unit pays to each employee for covered employment 11
in this State and another state during a calendar year if the employee was continuously 12
employed immediately before and after a transfer of a business from another state during 13
a calendar year; 14
(iii) a reorganized employer pays to each employee for covered 15
employment if the employee was continuously employed immediately before and after the 16
reorganization in a calendar year and if the contribution rate of the reorganized employer 17
is based on the experience with payrolls and benefit charges of the employing unit before 18
the reorganization in accordance with § 8–613(b) of this subtitle; or 19
(iv) an employing unit or predecessor employer or combination of 20
both pays to each employee for covered employment during a calendar year if the payrolls 21
and benefit charges of the predecessor employing unit are transferred to the successor 22
employing unit in accordance with § 8–613(d) or (e) of this subtitle. 23
(2) If the Federal Unemployment Tax Act or any other federal tax law that 24
allows a credit for a contribution to a state unemployment insurance fund increases the 25
maximum amount of wages taxable under that law in a calendar year to AN AMOUNT THAT 26
IS more than [$8,500] THE PERCE NTAGE OF THE AVERAGE ANNUAL WAGE FOR 27
EMPLOYEES IN THE STATE SET UNDER SUBSE CTION (C)(3) OF THIS SECTION , the 28
taxable wage base under paragraph (1) of this subsection shall be the same as under the 29
federal law. 30
(c) (1) The Secretary shall determine the rate of contribution for each 31
employing unit as of the computation date for the next calendar year. 32
(2) The rate of contribution is effective for 1 calendar year. 33
(3) (I) ON OR BEFORE JANUARY 31 EACH YEAR, THE DEPARTMENT 34 HOUSE BILL 554 3
SHALL: 1
1. DETERMINE THE A VERAGE ANNUAL WAGE F OR 2
EMPLOYEES IN THE STATE DURING THE CALE NDAR YEAR OF THE COM PUTATION 3
DATE; AND 4
2. MAKE AVAILABLE ON IT S WEBSITE THE AVERAG E 5
ANNUAL WAGE FOR EMPL OYEES IN THE STATE APPLICABLE TO T HE RATE OF 6
CONTRIBUTION . 7
(II) 1. THE SECRETARY SHALL ANNUALLY SET TH E TAXABLE 8
WAGE BASE AS AN INCR EASING PERCENTAGE OF THE AVERAGE ANNUAL W AGE FOR 9
EMPLOYEES IN THE STATE UNTIL THE TAXAB LE WAGE BASE PROVIDE D UNDER 10
SUBSUBPARAGRAPH 2 OF THIS SUBPARAGRAPH IS IN EFFECT. 11
2. BEGINNING CALENDAR YE AR 2028 AND EACH 12
CALENDAR YEAR THEREA FTER, THE TAXABLE WAGE BAS E SHALL BE 20% OF THE 13
AVERAGE ANNUAL WAGE FOR EMPLOYEES IN THE STATE. 14
(d) (1) By regulation, the Secretary shall set: 15
(i) THE TAXABLE WAGE BAS E; 16
(II) the date when contributions are due; and 17
[(ii)] (III) subject to § 8–607.1 of this subtitle, the manner in which 18
contributions are to be paid. 19
8–803. 20
(A) IN THIS SECTION , “STATE AVERAGE WEEKLY WAGE” MEANS THE 21
AVERAGE WEEKLY WAGE IN THE STATE, AS DETERMINED BY THE DEPARTMENT , 22
BASED ON THE WA GES IN TOTAL COVERED EMPLOYMENT FOR ALL E MPLOYERS IN 23
THE STATE FOR THE IMMEDIA TELY PRECEDING CALEN DAR YEAR. 24
(B) (1) (I) THE WEEKLY BENEFIT AM OUNT PAYABLE TO A CL AIMANT 25
UNDER THIS SECTION S HALL BE AT LEAST 15% OF THE STATE AVERAGE WEEKLY 26
WAGE BUT NOT MORE THAN THE AMOUNT OF T HE STATE AVERAGE WEEKLY WAGE 27
SET UNDER SUBPARAGRA PH (II) OF THIS PARAGRAPH . 28
(II) 1. THE SECRETARY SHALL ANNUA LLY SET THE 29
MAXIMUM WEEKLY BENEF IT AMOUNT AS AN INCR EASING PERCENTAGE OF THE 30
STATE AVERAGE WEEKLY WAGE UNTIL THE MAXIM UM WEEKLY BENEFIT AMOUNT 31
PROVIDED UNDER SUBSU BPARAGRAPH 2 OF THIS SUBPARAGRAPH IS IN EFFECT. 32 4 HOUSE BILL 554
2. BEGINNING CALENDAR YE AR 2028 AND EACH 1
CALENDAR YEAR THEREA FTER, THE MAXIMUM WEEKLY B ENEFIT SHALL BE 2
50% OF THE STATE AVERAGE WEEKLY WAGE. 3
3. THE SECRETARY SHALL ADOPT REGULATIONS TO 4
CARRY OUT THIS SUBPA RAGRAPH. 5
(2) FOR PURPOSES OF DETER MINING THE MINIMUM A ND MAXIMUM 6
WEEKLY BENEFIT AMOUN TS UNDER THIS SECTIO N, THE DEPARTMENT SHALL 7
CALCULATE AND UPDATE THE STATE AVERAGE WEEKLY WAGE ON JULY 1 EACH 8
YEAR. 9
(C) (1) FOR PURPOSES OF ASSIG NING A WEEKLY BENEFI T AMOUNT TO A 10
CLAIMANT, THE CLAIMANT ’S WEEKLY BENEFIT AMO UNT SHALL BE COMPUTE D BY 11
DIVIDING THE WAGES T HAT THE CLAIMANT WAS PAID FOR COVERED EMP LOYMENT 12
IN THE CALENDAR QUAR TER OF THE CLAIMANT ’S BASE PERIOD IN WHICH THOSE 13
WAGES WERE THE HIGHE ST BY 24. 14
(2) IN COMPUTING BENEFITS UNDER THIS SUBSECTIO N, A FRACTION 15
OF A DOLLAR SHALL BE ROUNDED TO THE NEXT HIGHER DOLLAR . 16
(D) THE WEEKLY BENEFIT AM OUNT CALCULATED UNDE R THIS SECTION 17
THAT IS IN EFFECT ON THE FIRST DAY OF A CLAIM ANT’S BENEFIT YEAR APPLI ES TO 18
THE CLAIMANT THROUGH OUT THAT BENEFIT YEA R. 19
(E) (1) EXCEPT AS PROVIDED IN § 8–1207 OF THIS TITLE FOR TH E WORK 20
SHARING PROGRAM , AN ELIGIBLE CLAIMANT SHALL BE PAID A WEEK LY BENEFIT 21
AMOUNT THAT IS COMPU TED BY: 22
(I) ASSIGNING THE CLAIMA NT’S WEEKLY BENEFIT AMO UNT 23
UNDER SUBSECTION (C) OF THIS SECTION; 24
(II) ADDING ANY ALLOWANCE FOR A DEPENDENT TO W HICH THE 25
CLAIMANT IS ENTITLED UNDER § 8–804 OF THIS SUBTITLE; AND 26
(III) SUBJECT TO PARAGRAPH (2) OF THIS SUBSECTION, 27
SUBTRACTING ANY WAGE S EXCEEDING $50 PAYABLE TO THE CLAIM ANT FOR THE 28
WEEK. 29
(2) EACH YEAR THE SECRETARY SHALL ADJUS T THE AMOUNT OF 30
WAGES REQUIRED TO BE SUBTRACTED UNDER PAR AGRAPH (1)(III) OF THIS 31
SUBSECTION FOR INFLA TION. 32 HOUSE BILL 554 5
(3) IN COMPUTING B ENEFITS UNDER THIS S UBSECTION, A FRACTION 1
OF A DOLLAR SHALL BE ROUNDED TO THE NEXT HIGHER DOLLAR . 2
(4) A PAYMENT TO AN INDIVI DUAL AS COMPENSATION FOR SERVING 3
AS AN ELECTION JUDGE FOR A LOCAL BOARD OF ELECTIONS IN THE STATE MAY NOT 4
BE INCLUDED WHEN COM PUTING THE WAGES REQUIR ED TO BE SUBTRACTED UNDER 5
PARAGRAPH (1)(III) OF THIS SUBSECTION . 6
(F) ANY CHILD SUPPORT PAY MENT THAT IS REQUIRE D UNDER § 8–807 OF 7
THIS SUBTITLE SHALL BE WITHHELD FROM BEN EFITS. 8
8–804. 9
(a) (1) Subject to subsection (b) of this section, in addition to the weekly benefit 10
amount [in the schedule of benefits] ASSIGNED IN ACCORDAN CE WITH § 8–803 OF THIS 11
SUBTITLE, a claimant shall be paid an allowance of [$8] $25 for each child, adopted child, 12
or stepchild of the claimant who, on the 1st day of the benefit year, is: 13
(i) wholly or partly supported by the claimant; and 14
(ii) under 16 years of age. 15
(2) A claimant shall submit to the Secretary the Social Security number or 16
copy of the birth certificate of each dependent for whom the claimant is to be paid an 17
allowance. 18
(b) (1) An allowance under this section is not payable: 19
(i) for more than 5 dependents of the claimant; 20
(ii) for longer than the number of weeks of benefits allowable to the 21
claimant for total unemployment; or 22
(iii) for any week in which an unemployment benefit is not payable 23
to the claimant. 24
(2) Benefits and the allowance under this section in any 1 week may not 25
exceed the [highest] STATE MAXIMUM weekly benefit amount [in the schedule of benefits], 26
AS DETERMINED UNDER § 8–803 OF THIS SUBTITLE . 27
(3) EACH YEAR THE SECRETARY SHALL ADJUS T THE AMOUNT OF THE 28
ALLOWANCE REQUIRED U NDER SUBSECTION (A) OF THIS SECTION FOR INFLATION. 29
(c) (1) The number of a claimant’s dependents shall be determined as of the 30 6 HOUSE BILL 554
1st day of the benefit year and shall be fixed for the duration of the benefit year. 1
(2) After an individual has been determined to be a dependent of a 2
claimant, the individual may not be considered to be a dependent of any other claimant 3
whose benefit year starts within 1 year after the determination. 4
(d) In the computation of a contribution rate under Part II of Subtitle 6 of this 5
title, an allowance for a dependent shall be considered a benefit. 6
(e) Notwithstanding subsection (d) of this section, an allowance for a dependent 7
may not be deducted from a claimant’s benefit account. 8
SECTION 3. AND BE IT FURTHER ENACTED, That this Act shall take effect July 9
1, 2025. 10