A provision buried in Minnesota's SF2077 omnibus bill could increase unemployment insurance taxes for auto service businesses tied to iron ore mining—even if you didn't lay anyone off.
Most Minnesota auto service owners haven't heard of SF2077, the Omnibus Outdoor Heritage Fund, Legacy and Lands bill. But if your shop supplies parts, labor, or services to iron ore mining operations or explosive manufacturing, a single provision in that bill could affect your unemployment insurance tax rate for years.
Here's what happened: Tucked into Article 6, Section 1, Subdivision 3(b) on page 61 of SF2077 is a provision creating up to 26 additional weeks of unemployment benefits for workers laid off by iron ore mining or explosive manufacturing companies between November 1, 2025 and March 15, 2026. That's roughly five extra months of jobless benefits per worker, funded by the state unemployment insurance trust fund.
Minnesota's unemployment insurance system is experience-rated. That means your company's UI tax rate depends partly on how many former employees have collected benefits under your account. When a worker you laid off collects UI, your experience rating goes up, and your future UI taxes increase.
Under SF2077, if you laid off workers during that November 2025 to March 2026 window, those workers can collect benefits through the week ending March 20, 2027—potentially 26 weeks longer than they otherwise could. Those extended benefits are charged to your UI account, which means your experience rating could climb, raising your tax rate for the next several years.
This applies retroactively from November 1, 2025, meaning the window is already open. If you've already made layoffs during this period, the provision is already in effect.
The risk is real for auto service shops in the supply chain. If your business provides maintenance, repair, parts, or specialized services to iron ore mining operations or companies that manufacture explosives for mining, you're in scope. Even indirect suppliers—shops that service equipment used by these industries—should review their layoff records from November 2025 onward.
Auto service shops that are not connected to mining or explosive manufacturing are not affected by this provision.
For shops that are in scope, the practical question is straightforward: Did you lay off any employees between November 1, 2025 and March 15, 2026? If yes, those workers' extended benefits will be charged to your account. If no, this provision doesn't change your UI tax situation.
The benefits themselves are available through March 20, 2027, so laid-off workers can claim them through that date. If you're an employer in this sector who made staffing cuts during the window, you should expect your UI experience rating to reflect those extended benefits when your next rate notice arrives.
Understanding this provision now—before rate notices arrive—gives you time to review your layoff records, understand your potential exposure, and plan accordingly. If you're unsure whether your shop falls within the scope of iron ore mining or explosive manufacturing supply chains, your accountant or HR advisor can help clarify.
Source: Minnesota SF2077, Article 6, Section 1, Subdivision 3(b), effective retroactively from November 1, 2025.