Hawaii’s Unemployment Compensation Trust Fund (UCTF) has a positive balance of $205 million despite the record number of unemployment insurance claims made during COVID-19.
The Hawaii State Department of Labor and Industrial Relations (DLIR) made the announcement in a release from Gov. David Ige’s office. An estimated $600 million was quickly drained from the UCTF during the pandemic, and another $847 million from federal pandemic funding went to spare employers the cost of interest on loans from the U.S. Department of Labor (Title XII).
Other states owe billions to the U.S. Treasury for unemployment insurance (UI) loans, including California at $18 billion and New York at $8 billion. Employers in these states are paying increasing rates of federal UI taxes to cover the loans and interest, up to a maximum of $420 per employee per year.
“The DLIR paid out nearly $6.5 billion in unemployment insurance benefits and assistance as a critical part of the safety net during the COVID-19 pandemic,” Gov. Ige said in the release. “With the assistance of the Legislature, we have minimized significant impacts to our business community and stewarded the fund to a positive balance.”
According to the release, Hawaii’s UI program is funded exclusively by employers via state and federal payroll taxes on wages.
“The system is designed to replenish the UI fund during times of economic growth in preparation for high unemployment during recessions,” the release said.
DLIR Director Anne Perreira-Eustaquio said the governor's office is looking to build upon its safety net for the future.
“Gov. Ige has also allocated $42.5 million to expand the Hawaii Unemployment Insurance Modernization (HUI-MOD) project,” she said in the release. “Expanding the scope of the HUI Mod project to replace the aging, legacy mainframe system strengthens the UI safety net and prepares it for the next economic downturn.”