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Employers stuck with bill when state's late paying back UI loans to Fed

March 12, 2014

PROVIDENCE – FUTA may seem like a funny name for a special tax being assessed on employers in Rhode Island and other states that had to borrow money from the federal government to pay unemployment benefits during the recession, but to David Chenevert, president of Swissline Precision Manufacturing in Cumberland, it is no joke.

Chenevert says his company is being hammered with what amounts to a $4,800 bill from the federal government, and his fellow employers throughout the state are getting hit with similar bad news – they will lose a credit worth just shy of 1 percent of their annual unemployment tax this year because the state is delinquent in paying back some of the nearly half-billion it borrowed to pay regular and extended unemployment benefits several years ago.

Cumberland Rep. Karen MacBeth says the state should “make this right,” and she will sponsor legislation that would require the state to reimburse businesses for the extra amounts they must pay because the state didn’t make good on its debt.

“It is not right,” Chenevert said in an e-mail to MacBeth and others. “We fight to get through the recession, we hire back people and we now get whacked because of the recession rather than get a pat on the back for surviving."

Full story appears on page A1 of Thursday's Times and Wednesday's Call.

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