By Kevin Haas
Rock River Current
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ROCKFORD — Legislation is in the works to try to bring relief to restaurants and other small businesses hit with a spike in their unemployment insurance rates that came after shutdowns meant to stop the spread of the coronavirus.
State Rep. Maurice West, a Democrat from Rockford, said he traveled to Springfield earlier this month to meet with the Illinois Department of Employment Security on behalf of The Norwegian, The Olympic Tavern and other small businesses who saw their unemployment rates skyrocket. In some cases those rates rose by a multiple of seven, costing the businesses tens of thousands of dollars.
Those restaurants sounded the alarm to state lawmakers this year after they said layoffs made in early 2021 in order to comply with state-imposed shutdowns led to increased rates now.
Our initial reporting: ‘It hurts’: Spike in unemployment insurance rates hits Rockford restaurants
State legislators canceled any increase in unemployment rates from March 15, 2020, to Jan. 2, 2021, to protect businesses against paying higher rates for layoffs caused by state-mandated closures. However, it wasn’t until late January that year that indoor dining was permitted in northern Illinois, and even then capacity was limited to 25% per room.
The Norwegian, a unique locally owned restaurant on Rockford’s North End, faced one of the steepest increases. Owner Emily Hurd told the Rock River Current last month that its rate went from less than 1% to the maximum rate of 7.625%. The minimum rate for 2022 is 0.725%. That triggered a bill of roughly $85,000 that she owed IDES.
“She was trying to protect her employees, so if there’s any way we can help with that, let’s make it happen,” West told the Rock River Current last week. “Olympic Tavern has been a pillar in our community that even pivoted when other restaurants were not trying to pivot. We’ve got to do what we can to help them, along with those who have not come to us yet.”
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The legislation is still being drafted. It will then be presented to stakeholder groups such as the Illinois Retail Merchants Association before being presented to the General Assembly, West said.
“It would work to reduce charges against people in the early part of 2021 while restaurants were still ordered to be closed,” said Jeremy Ennis, chief of staff for West.
Unemployment insurance rates are determined by multiple factors, including total wages and unemployment claims. The simplest way to explain the rate, however, is that businesses with more layoffs have higher rates to pay.
How the final legislation will look isn’t clear, but Ennis said it would reduce charges for unemployment claims during state-mandated restrictions and take into account the total wages portion of the formula.
“It kind of tackles the formula from two points of view,” he said.
West said he hopes the legislation can be passed this year. Lawmakers next return to Springfield in mid-November for the veto session, which concludes in early December.
“Hopefully we can get it done in veto,” West said.
This article is by Kevin Haas. Email him at khaas@rockrivercurrent.com or follow him on Twitter at @KevinMHaas or Instagram at @thekevinhaas