A closed sign in Engelberg Antiks in downtown Salem on Thursday, March 19. (Saphara Harrell/Salem Reporter)
Businesses in Oregon may get some additional pandemic relief thanks to a new law allowing a deferral of 2021 unemployment insurance payroll taxes.
Gov. Kate Brown signed House Bill 3389 on July 27. The legislation will automatically enroll qualifying businesses for a financial break that will provide three benefits: one-third of of unemployment insurance can be deferred until June 30, 2022, up to 100% of those deferrable taxes may be forgiven dependent on the tax increase from 2020-2021 and the employer’s tax experience rating from 2022 to 2023 will be rolled back to pre-pandemic levels.
The level of the 2021 unemployment insurance that businesses are eligible to defer, according to the Oregon Employment Department, depends on how much their unemployment insurance rate increased from 2020-2021.
A 0.5% to 1% increase will be eligible for deferral only. Businesses that saw an increase of more than 1% will be eligible for 50% of their deferred payments to be forgiven. An increase of more than 1.5% means 75% of their deferred payments can be forgiven. If a business saw more than a 2% increase, it is eligible for 100% of its deferrable unemployment insurance tax payments to be forgiven.
“There is no question that Oregon’s economic backbone, our small businesses—as well as the hardworking Oregonians employed at those businesses—were deeply impacted by the pandemic,” said Governor Brown in a prepared statement regarding the legislation. “But through these challenging times, we’ve seen Oregonians respond with creativity and resilience. As we’ve entered the next chapter of the pandemic and look to economic recovery, HB 3389 should provide some relief for businesses, while at the same time ensuring we can continue to provide unemployment insurance benefits to all Oregonians who need them.”
To qualify, businesses must meet three conditions: all outstanding unemployment insurance tax contributions must be paid, all payroll reports for 2021 must be filed and employers must pay all tax liabilities on time for 2021 that are not deferred or forgiven.
At a press conference held on Tuesday, Oregon Employment Department Director David Gerstenfeld said of the bill, “This legislation is another tool to help our economy through the recovery.”
-Caitlyn May
