Governor Signs Bill to Fund Front-Line Worker Pay and Unemployment Insurance Repayment

May 2, 2022

Under this new law, employers in front-line sectors, including cities, must provide notice advising all current employees who may be eligible for the front-line worker pay.

After months of disagreement, the House and Senate agreed on legislation allocating $500 million for bonuses to front-line workers and $2.7 billion to the unemployment trust fund. Gov. Tim Walz signed the bill into law on April 29 to be effective upon enactment.

SF 2677 (Sen. Eric Pratt, R-Prior Lake) became the vehicle bill for a compromise between the House and Senate on front-line worker pay and repaying and replenishing the state’s unemployment trust fund. These were two of this legislative session’s biggest issues.

Front-line worker pay

Under this law, employers in front-line sectors, including cities, must provide notice advising all current employees who may be eligible for the front-line worker pay and how to apply. Employers must do this within 15 days after the application period is opened, which is expected to be in the coming weeks. The Department of Labor and Industry is currently developing guidance to employers regarding the notice. Workers will be able to apply for the bonus pay via an online portal once they begin accepting applications.

Get more details, read about the online application system, and sign up for updates from the state about bonus pay for eligible COVID-19 front-line workers

Background on front-line worker pay

At the end of the 2021 legislative session, a Frontline Worker Pay Working Group was created to provide $250 million in bonus pay to those who worked on the front lines of the COVID-19 pandemic. After months of meetings in the interim, the group failed to reach an agreement and throughout session the issue became a major point of contention between the House and Senate.

Earlier this session, the House passed HF 2900 (Rep. Cedrick Frazier, DFL-New Hope) to provide front-line pay to a broad group of workers with payments of $1,500 but the issue was never taken up in the Senate. The compromise provided the same parameters for eligibility as the House proposal to an estimated 667,000 workers but with a reduced payment amount of $750 per worker.

Unemployment insurance

The new law includes an agreement to repay the state’s unemployment trust fund debt to the federal government of $1.4 billion and replenish the state’s account with an appropriation of $1.3 billion to prevent increases to businesses’ unemployment taxes.

Without action by the Legislature, businesses would have had to pay to refill the state’s fund, which was emptied during the COVID-19 pandemic, through a surcharge and increased base rates on payroll taxes. The law directs the Department of Employment and Economic Development to refund or credit businesses that have already paid higher rates in advance of the first quarter payments due April 30.

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