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EXPLANATION: CAPITALS INDICATE MATTER ADDED TO EXISTING LAW.
[Brackets] indicate matter deleted from existing law.
*hb0188*
HOUSE BILL 188
K2 6lr1147
(PRE–FILED) CF SB 3
By: Delegate Charkoudian
Requested: October 9, 2025
Introduced and read first time: January 14, 2026
Assigned to: Economic Matters
A BILL ENTITLED
AN ACT concerning 1
Unemployment Insurance Modernization Act of 2026 2
FOR the purpose of repealing and establishing the methodology used to calculate the 3
weekly benefit amount; altering the taxable wage base used to determine employer 4
contributions to the Unemployment Insurance Trust Fund and the amount of earned 5
wages subtracted from a weekly benefit amount; requiring the Maryland 6
Department of Labor, on or before a certain date each year, to determine and make 7
available online the State annual average wage applicable to the rate of contribution; 8
requiring the Secretary of Labor to set the taxable wage base and the maximum 9
weekly benefit amount in a certain manner for certain years; and generally relating 10
to unemployment insurance. 11
BY repealing 12
Article – Labor and Employment 13
Section 8–803 14
Annotated Code of Maryland 15
(2025 Replacement Volume) 16
BY repealing and reenacting, with amendments, 17
Article – Labor and Employment 18
Section 8–607(b), (c), and (d)(1) and 8–804(a) and (b) 19
Annotated Code of Maryland 20
(2025 Replacement Volume) 21
BY adding to 22
Article – Labor and Employment 23
Section 8–803 24
Annotated Code of Maryland 25
(2025 Replacement Volume) 26
2 HOUSE BILL 188
SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF MARYLAND, 1
That Section(s) 8 –803 of Article – Labor and Employment of the Annotated Code of 2
Maryland be repealed. 3
SECTION 2. AND BE IT FURTHER ENACTED, That the Laws of Maryland read 4
as follows: 5
Article – Labor and Employment 6
8–607. 7
(b) (1) Subject to paragraph (2) of this subsection, the taxable wage base is the 8
[first $8,500 in wages] AMOUNT SET UNDER SUBSECTION (C)(3) OF THIS SECTION that: 9
(i) an employing unit pays to each employee for covered employment 10
during a calendar year; 11
(ii) an employing unit pays to each employee for covered employment 12
in this State and another state during a calendar year if the employee was continuously 13
employed immediately before and after a transfer of a business from another state during 14
a calendar year; 15
(iii) a reorganized employer pays to each employee for covered 16
employment if the employee was continuously employed immediately before and after the 17
reorganization in a calendar year and if the contribution rate of the reorganized employer 18
is based on the experience with payrolls and benefit charges of the employing unit before 19
the reorganization in accordance with § 8–613(b) of this subtitle; or 20
(iv) an employing unit or predecessor employer or combination of 21
both pays to each employee for covered employment during a calendar year if the payrolls 22
and benefit charges of the predecessor employing unit are transferred to the successor 23
employing unit in accordance with § 8–613(d) or (e) of this subtitle. 24
(2) If the Federal Unemployment Tax Act or any other federal tax law that 25
allows a credit for a contribution to a state unemployment insurance fund increases the 26
maximum amount of wages taxable under that law in a calendar year to AN AMOUNT THAT 27
IS more than [$8,500] THE PERCENTAGE OF TH E AVERAGE ANNUAL WAG E FOR 28
EMPLOYEES IN THE STATE SET UNDER SUBSE CTION (C)(3) OF THIS SECTION , the 29
taxable wage base under paragraph (1) of this subsection shall be the same as under the 30
federal law. 31
(c) (1) The Secretary shall determ ine the rate of contribution for each 32
employing unit as of the computation date for the next calendar year. 33
(2) The rate of contribution is effective for 1 calendar year. 34
(3) (I) ON OR BEFORE JANUARY 31 EACH YEAR, THE DEPARTMENT 35
HOUSE BILL 188 3
SHALL: 1
1. DETERMINE THE AVERAGE ANN UAL WAGE FOR 2
EMPLOYEES IN THE STATE DURING THE CALE NDAR YEAR OF THE COM PUTATION 3
DATE; AND 4
2. MAKE AVAILABLE ON IT S WEBSITE THE AVERAG E 5
ANNUAL WAGE FOR EMPL OYEES IN THE STATE APPLICABLE TO T HE RATE OF 6
CONTRIBUTION. 7
(II) 1. THE SECRETARY SHALL ANNUALLY SET THE TAXABLE 8
WAGE BASE AS AN INCREASING PERCENTAGE OF THE AVERAGE ANNUAL WAGE FOR 9
EMPLOYEES IN THE STATE UNTIL THE TAXAB LE WAGE BASE PROVIDE D UNDER 10
SUBSUBPARAGRAPH 2 OF THIS SUBPARAGRAPH IS IN EFFECT. 11
2. BEGINNING CALENDAR Y EAR 2029 AND EACH 12
CALENDAR YEAR THEREA FTER, THE TAXABLE WAGE BAS E SHALL BE 16% OF THE 13
AVERAGE ANNUAL WAGE FOR EMPLOYEES IN THE STATE. 14
(d) (1) By regulation, the Secretary shall set: 15
(i) THE TAXABLE WAGE BASE; 16
(II) the date when contributions are due; and 17
[(ii)] (III) subject to § 8–607.1 of this subtitle, the manner in which 18
contributions are to be paid. 19
8–803. 20
(A) IN THIS SECTION , “STATE AVERAGE WEEKLY WAGE” MEANS THE 21
AVERAGE WEEKLY WAGE IN THE STATE, AS DETERMINED BY THE DEPARTMENT, 22
BASED ON THE WAGES IN TOTA L COVERED EMPLOYMENT FOR ALL EMPLOYERS IN 23
THE STATE FOR THE IMMEDIATELY PRECEDING CALENDAR YEAR. 24
(B) (1) (I) THE WEEKLY BENEFIT AM OUNT PAYABLE TO A CL AIMANT 25
UNDER THIS SECTION S HALL BE AT LEAST 15% OF THE STATE AVERAGE WEEKLY 26
WAGE BUT NOT MORE THAN THE AMOUNT OF THE STATE AVERAGE WEEKLY WAGE 27
SET UNDER SUBPARAGRAPH (II) OF THIS PARAGRAPH. 28
(II) 1. THE SECRETARY SHALL ANNUA LLY SET THE 29
MAXIMUM WEEKLY BENEF IT AMOUNT AS AN INCR EASING PERCENTAGE OF THE 30
STATE AVERAGE WEEKLY WAGE UNTIL THE MAXIMUM WEEKLY BENEF IT AMOUNT 31
PROVIDED UNDER SUBSUBPARAGRAPH 2 OF THIS SUBPARAGRAPH IS IN EFFECT. 32
4 HOUSE BILL 188
2. BEGINNING CALENDAR YE AR 2027 AND EACH 1
CALENDAR YEAR THEREA FTER, THE MAXIMUM WEEKLY B ENEFIT SHALL BE 2
40% OF THE STATE AVERAGE WEEKLY WAGE. 3
3. THE SECRETARY SHALL ADOPT REGULATIONS TO 4
CARRY OUT THIS SUBPARAGRAPH. 5
(2) FOR PURPOSES OF DETER MINING THE MINIMUM A ND MAXIMUM 6
WEEKLY BENEFIT AMOUN TS UNDER THIS SECTIO N, THE DEPARTMENT SHALL 7
CALCULATE AND UPDATE THE STATE AVERAGE WEEKLY WAGE ON JULY 1 EACH 8
YEAR. 9
(C) (1) FOR PURPOSES OF ASSIGNING A WEEKLY BENEFIT AMOUNT TO A 10
CLAIMANT, THE CLAIMANT’S WEEKLY BENEFIT AMO UNT SHALL BE COMPUTE D BY 11
DIVIDING THE WAGES THAT THE CLAIMANT WAS PAID FOR COVERED EMPLOYMENT 12
IN THE CALENDAR QUAR TER OF THE CLAIMANT ’S BASE PERIOD IN WHICH TH OSE 13
WAGES WERE THE HIGHEST BY 24. 14
(2) IN COMPUTING BENEFITS UNDER THIS SUBSECTION, A FRACTION 15
OF A DOLLAR SHALL BE ROUNDED TO THE NEXT HIGHEST DOLLAR. 16
(D) THE WEEKLY BENEFIT AM OUNT CALCULATED UNDE R THIS SECTION 17
THAT IS IN EFFECT ON THE FIRST DAY OF A CLAIMANT’S BENEFIT YEAR APPLIES TO 18
THE CLAIMANT THROUGHOUT THAT BENEFIT YEAR. 19
(E) (1) EXCEPT AS PROVIDED IN § 8–1207 OF THIS TITLE FOR THE WORK 20
SHARING PROGRAM, AN ELIGIBLE CLAIMANT SHALL BE PAID A WEEK LY BENEFIT 21
AMOUNT THAT IS COMPUTED BY: 22
(I) ASSIGNING THE CLAIMA NT’S WEEKLY BENEFIT AMO UNT 23
UNDER SUBSECTION (C) OF THIS SECTION; 24
(II) ADDING ANY ALLOWANCE FOR A DEPENDENT TO WHICH THE 25
CLAIMANT IS ENTITLED UNDER § 8–804 OF THIS SUBTITLE; AND 26
(III) SUBTRACTING ANY WAGE S EXCEEDIN G $50 PAYABLE TO 27
THE CLAIMANT FOR THE WEEK. 28
(2) IN COMPUTING BENEFITS UNDER THIS SUBSECTION, A FRACTION 29
OF A DOLLAR SHALL BE ROUNDED TO THE NEXT HIGHEST DOLLAR. 30
(3) A PAYMENT TO AN INDIVIDUAL AS COMPENSATION FOR SERVING 31
HOUSE BILL 188 5
AS AN ELECTION JUDGE FOR A LOCAL BOARD OF ELECTIONS IN THE STATE MAY NOT 1
BE INCLUDED WHEN COMPUTING THE WAGES REQUIRED TO BE SUBTRACTED UNDER 2
PARAGRAPH (1)(III) OF THIS SUBSECTION. 3
(F) ANY CHILD SUPPORT PAY MENT THAT IS REQUIRE D UNDER § 8–807 OF 4
THIS SUBTITLE SHALL BE WITHHELD FROM BENEFITS. 5
8–804. 6
(a) (1) Subject to subsection (b) of this section, in addition to the weekly benefit 7
amount [in the schedule of benefits] ASSIGNED IN ACCORDANCE WITH § 8–803 OF THIS 8
SUBTITLE, a claimant shall be paid an allowance of $8 for each child, adopted child, or 9
stepchild of the claimant who, on the 1st day of the benefit year, is: 10
(i) wholly or partly supported by the claimant; and 11
(ii) under 16 years of age. 12
(2) A claimant shall submit to the Secretary the Social Security number or 13
copy of the birth certificate of each dependent for whom the claimant is to be paid an 14
allowance. 15
(b) (1) An allowance under this section is not payable: 16
(i) for more than 5 dependents of the claimant; 17
(ii) for longer than the number of weeks of benefits allowable to the 18
claimant for total unemployment; or 19
(iii) for any week in which an unemployment benefit is not payable 20
to the claimant. 21
(2) Benefits and the allowance under this section in any 1 week may not 22
exceed the [highest] STATE MAXIMUM weekly benefit amount [in the schedule of benefits], 23
AS DETERMINED UNDER § 8–803 OF THIS SUBTITLE. 24
SECTION 3. AND BE IT FURTHER ENACTED, That this Act shall take effect July 25
1, 2026. 26