Raised unemployment tax could kill businesses

LIHU‘E — While some jobless residents still face issues as they try to apply for extended unemployment insurance benefits, businesses are upset about state unemployment taxes being raised automatically as of Jan. 1.

Companies statewide are concerned about employer rates for state unemployment taxes that have been automatically increased by law, which according to payroll company ProService is going to hurt small businesses statewide.

“At ProService, we’re advocating that the bill be amended and the schedule be held at Schedule C for at least two years,” ProService CEO Ben Godsey said in a letter sent to clients last month.

“Small businesses cannot handle a steep SUTA (state unemployment taxes) increase. A local business with five employees could pay an extra $7,000 in SUTA taxes,” he said in his letter.

”Second, the government cannot fairly hold employers solely responsible for replenishing the trust fund. Third, our lawmakers need to look for ways to replenish the trust fund outside of tax hikes on employers.”

Megan Fox, executive director of Malama Kaua‘i, which focuses on localized economic deployment, echoed Godsey’s statement.

“To force small, local employers to immediately make up for the state’s unemployment losses is unconscionable in today’s business climate,” Fox said.

“These businesses did not create the problem, and shouldn’t be on the line as the solution to it. If they increase payroll costs like this, it’s going to have an even further negative impact on job growth and stabilization when we need it the most.”

Still troubles with state Unemployment Insurance

Mark Schmitt, a furloughed pilot at Blue Hawaiian Helicopter on Kaua‘i since March of 2020, shared his experience with the Unemployment Insurance Division as he tries to apply for extended benefits.

“Towards the end of May is when we started getting paid unemployment,” Schmitt said. “So those issues were worked through, through various phone calls. And, keep in mind, also that we were kind of working as a group because, you know, we keep in touch. The pilots and the ground staff do keep in touch, and we let each other know if, you know, there’re issues.”

Schmitt said his unemployment benefits ran out on Christmas Eve, and for over a month he has been trying to contact the unemployment office through numerous phone calls and emails.

“The first week of any car payment comes due the first week of February,” Schmitt said. “So as I was getting closer to February, I’m getting more and more agitated and trying to get a hold of somebody if I had seen what’s going on because there really is no information on the unemployment website as specifically what the issues are.

“All they say is the system has been updated now. I am sure this is a software issue. But we’re not getting any kind of information. And I don’t even know if the public is informed,” Schmitt said.

Like many unemployed residents, Schmitt has reached out to government officials and utilized the unemployment office’s helpline. However, he is disappointed that there is no information or help out there for folks like him to make the transition.

“Well, I just started exploring, reaching out, because I was ramped up,” Schmitt said. “I didn’t get paid this week. So I’m going to try to contact all the senators and all the congressmen, and all state senators. Initially, what I try to do is just kind of just call the helpline every day last week, actually, for the last two weeks, and I called the hotline at different times, and have not been able to get through to them.

“And so, like right now we’re coming to the end of the month, and this is when little things like power bills and, you know, electric power bills, your association fees, Verizon phone bill, you know, all those things kind of come due,” said Schmitt.

HB 567 addresses telework

Also, the state House Committee on Labor &Tourism approved a bill Tuesday that would mandate state departments to create telework and alternative-work-schedule policies to help state employees, especially women, work from home and maintain their jobs while taking care of their keiki.

According to the U.S. Department of Labor, women had to leave their jobs four times the rate of men in September 2020.

The state House Committee on Labor &Tourism unanimously passed HB 567 on Tuesday. It has been referred to other committees.

The new bill will “require each department to establish a telework and alternative-work-schedule policy. It will also establish a minimum percentage of eligible employees who are required to telework or use an alternative-work-schedule policy and, where feasible, it will require departments to allow employees who act as a caregiver to telework or use an alternative schedule.

The committee further finds that the state continued to implement an outdated telework policy that wrongly prohibits caregiving while teleworking.

Women are unfairly penalized by this policy because societal norms reinforce stereotypes of women as primary caregivers. When Hawai‘i public schools closed their doors in mid-March 2020 and thrust educational responsibilities onto parents, women overwhelmingly performed those additional tasks.

State Rep. Nadine Nakamura of District 14 (Wailua to the North Shore) supports the bill.

“I’m a big fan of telework, and believe we should encourage telework where it makes sense,” Nakamura said. “This bill starts with our state government. It requires departments to assess who would be eligible and resources needed to encourage telework.”


Stephanie Shinno, features, education, business, and community reporter can be reached at 245-0424 or sshinno@thegardenisland.com.

  1. I saw a Vampire once February 3, 2021 1:58 am Reply

    I don’t see anything in the County Of Kaua’i County Councilmembers. Some of them are unemployed. For example your big man Bernard P. Carvalho jr. would be considered a wasted personnel in anybody’s business. Let’s not fool ourselves here. If you’re a business owner, would you want an ex hula bowl 1979 football player in your meeting? Certainly not. As far as paying more taxes, I don’t think these county meetings are worth anything to the public. So I’ll say it here. I’d rather have Donald Trump in office and back as president, than to be represented by a county councilmember as Carvalho jr. I think I made my point clear. For the business owner and for capitalism.

  2. randy kansas February 3, 2021 1:24 pm Reply

    Hawaii was barely making it with tourists, no way gonna make it without…and 49th place in the USA for doing business…

    1. Jake February 3, 2021 4:50 pm Reply

      Yep. Bingo. Could not have said it better.

  3. islandgirl February 3, 2021 3:40 pm Reply

    To clarify, the unemployment tax has NOT gone up, but without temporarily amending the statute it would go to the highest schedule. HB1278 is the vehicle for this.

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