Employers are required to pay Unemployment Insurance contributions on wages (“remuneration”) paid to each employee in a calendar year up to a certain level. This is called the “wage base.” Wages received by each employee above this level are not subject to contributions for Unemployment Insurance.
On January 1, 2014, several provisions of the recent Unemployment Insurance reform legislation took effect, including one which affects the wage base. Going forward, the wage base on which employers pay Unemployment Insurance contributions will adjust on January 1st of each year as shown in this chart:
Year 2013 and prior
After 2026, the wage base is permanently adjusted on January 1 of each year to 16% of the state average annual wage, rounded up to the nearest $100. The state average annual wage is established no later than May 31 of each year. The average annual wage cannot be reduced from the prior year’s level.
New York State's Unemployment Insurance system was broken. For years, the State's Unemployment Insurance system has not had enough funds to pay for claims filed by unemployed workers. As a result, the state has been forced to borrow funds from the federal government to cover the difference, and employers were saddled with paying a $3.5 billion debt with interest. In addition, the system was out of sync with current economic realities, with benefits to workers remaining stagnant since 1999. By increasing the wage base and eliminating the lowest employer contribution rates, New York State will pay off the debt to the federal government sooner, which will save approximately $200 million in interest alone. New York State employers will save about $400 million over ten years. When the debt is paid off and the Trust Fund can once again cover the claims that it pays out, rates for all employers will drop. The risk of borrowing from the federal government will be lower and payments for employers will be more predictable than the old system of yearly surcharges.
All of the regular contributions employers pay timely go into their individual accounts, which will help to keep rates lower in the future. With outstanding federal loans, however, employers also now pay a higher flat-rate contribution on FUTA which increases by 0.3 percent each year, up to 0.9 percent for 2014. The flat-rate FUTA contribution is the same for all employers and is not credited against your individual account. With this flat-rate federal provision, the federal FUTA imposes a repayment schedule that is assessed against all employers regardless of usage.
With Unemployment Insurance reform, the increased flat-rate FUTA contribution will return to non-loan status levels two years earlier than it would have without reform. When the Unemployment Insurance Trust Fund is stabilized, employer costs will be more equitable and predictable because costs will be more closely connected to their experience in using the Unemployment Insurance system. Although you may be paying more contributions initially, the federal loan will be paid off two years earlier than without reform. This will result in reduced flat-rate assessments for federal FUTA contributions and less need to use federal Unemployment Insurance loan funds in the future. Also, the additional contributions you pay now will go into your own Unemployment Insurance account.
As the Unemployment Insurance Trust Fund balance increases, contribution rates for all employers will decrease. As a result of the reform, employers will save an estimated $400 million. Those payments will also be more predictable because the risk of borrowing will be less.
Once the federal debt is paid, which the Department estimates will occur in 2016 - two years earlier than without reform, employers will no longer have to pay the Interest Assessment Surcharge or the additional FUTA. In addition, reform restructures the Unemployment Insurance system to make it self-correcting and sustainable. As the risk of borrowing to pay benefits decreases and the Trust Fund returns to health, employers' contributions will decrease. Reform will also ensure that employers are not charged for a former employee's claim when the loss of employment was the employee's fault (for example, a voluntary quit or due to misconduct).
Yes. Current projections indicate that New York State will owe interest to the federal government on September 30, 2014. State law requires employers to pay any interest owed to the federal government. The Department estimates that interest will no longer be owed in 2016, two years earlier than without reform. Until the loan is repaid, employers will be required to pay the IAS. The IAS for 2014 has not been finalized, but is expected to be less than last year.
The Shared Work Program gives employers an alternative to laying off workers during business downturns by allowing them to work a reduced work schedule and collect partial Unemployment Insurance. Instead of cutting staff, employers can reduce the number of hours of all employees or just a certain group.
Shared Work benefits paid to your employees are charged to your Unemployment Insurance experience rating account. This may have an effect on your Unemployment Insurance contribution rate, depending on your specific situation. If you have questions, please call our Liability and Determination Section at (518) 457-2635.
An employer must respond timely and with adequate detail to our requests for information in order to be relieved of charges for benefits paid to employees who are later determined to be ineligible for benefits.
However, if there was a good reason ("good cause") you did not respond timely and with adequate detail to our request for information, we may be able to relieve the charges to your account, but only once. Good cause includes any significant event that you could not reasonably have anticipated which affects your ability to respond in a timely manner. In addition, you must give us adequate detail so we can make a determination as to whether or not the former employee is eligible for benefits.
The Department of Labor must receive your response within the number of calendar days specified in the written or verbal request. We recommend that you respond via fax. We also encourage you to look into the State Information Data Exchange System (SIDES) system, which allows you to respond to our requests for information electronically. For more information about SIDES, please check our website at http://labor.ny.gov/ui/employerinfo/sides-overview.shtm.
Under certain circumstances, employers will not be relieved of charges a second time unless the response was late because of a Department of Labor error or the President or Governor has declared an emergency or disaster and the cause of the delay is directly related to the emergency or disaster.
Most requests for information relate to the reason(s) your former employee(s) lost employment, but there may be others. For your response to us to be considered adequate, it must:
Specify the reason(s) for the separation or other issue affecting the claimant’s eligibility or entitlement for benefits;
Answer, in good faith, all questions in detail; and
Provide all relevant information and documentation for the Department of Labor to render a correct determination regarding the claimant’s eligibility or entitlement for benefits.
Also, the Department of Labor may need to ask an employer follow-up questions after the employer completely fills out a questionnaire. If the employer fails to respond to our follow-up questions, the employer would then be considered to have not responded adequately to our request(s) for information.
Yes. Prior to UI Reform, only the separating employer and certain other "controlling" base period employers were allowed to protest a claim for misconduct and voluntarily leaving employment without good cause. Under UI Reform all base period employers can now protest a claim due to misconduct or voluntarily leaving employment without good cause as long as they respond to the Department's notice of potential charges within 10 calendar days.
A claimant may be eligible for Unemployment Insurance if the weekly payments of dismissal/ severance pay are the same as or less than the maximum benefit rate. The claimant must notify the Telephone Claims Center if they receive or will receive dismissal/severance pay within 30 days of their last day of employment. This applies even if they receive dismissal/severance pay after filing a claim. If the claimant does not notify us, they may receive an overpayment of benefits, which must be paid back. The claimant also may be subject to other penalties.
A claimant will not be eligible for benefits immediately if:
They receive weekly dismissal/severance payments that are greater than the weekly benefit rate; or
Their employer gave them a lump sum payment and the weekly pro-rated amount of the payment is greater than the maximum weekly benefit rate.
A claimant may be eligible to collect benefits if:
The weekly amount of dismissal/severance pay is the same as or less than the maximum weekly benefit rate; or
The dismissal/severance pay is stopped and the claimant has enough earnings in the base period to establish a claim.
The initial dismissal/severance payment is made more than 30 days after the claimant's last day of work.
No. Payments made under the New York State WARN Act (Worker Adjustment and Retraining Notification Act -- Article 25-A of the Labor Law) are not considered dismissal/severance pay. The WARN Act states that Unemployment Insurance benefits may not be denied or reduced because a claimant is receiving payment under the WARN Act.
Yes. If the first dismissal/severance payment is received more than 30 days after the claimant's last day of employment, the statute does not apply and the claimant is eligible for benefits. If the first dismissal/severance payment is made within 30 days of the claimant's last day of employment, the statute applies and the claimant may not be eligible for benefits as long as they are receiving dismissal/ severance pay.
No. Any dismissal/severance payment received within 30 days of a claimant's last day of work, whether as a lump sum or in payments made over a period of time, may affect benefits under Unemployment Insurance reform.
Usually, the time period covered by the lump sum payment will be clearly spelled out in the dismissal/severance pay agreement or plan. If it is not, the Department of Labor's Telephone Claims Center will determine the time period that the lump sum payment covers. They will look at actual average weekly pay or the average weekly pay of the claimant's highest-earning calendar quarter of the base period from the employer paying the dismissal/severance pay to determine the length of time covered by the lump sum dismissal/severance payment.
The same rules apply as if your former employee(s) were receiving the dismissal/severance directly from you. However, your employee(s) are considered to have received dismissal/severance pay when it is transferred from you to the union, not when the former employee(s) actually receive it.
An employer is paying dismissal/severance pay. What a former employee does with that payment does not change the fact it is dismissal/severance pay. The claimant would not be eligible for benefits as long as they are receiving dismissal/severance payments that exceed their benefit rate.
Effective October 1, 2013, if a claimant purposely makes a false statement or representation to get benefits, they may be charged $100 or a 15 percent monetary penalty on the full amount of the overpaid benefits, whichever is higher.
No.If a claimant receives an overpayment of benefits because they purposely gave false information to or withheld information from the Department of Labor in order to get benefits, the monetary penalty must be assessed.
No. Both a monetary penalty and forfeit day or days may be imposed for the same overpayment(s) of benefits. Forfeit days are days in the future when a claimant is eligible to receive benefits, but cannot because they have forfeited their right to receive benefits for those days as a penalty.
Yes. The monetary penalty applies to benefits for all Unemployment Insurance programs. These include regular Unemployment Insurance (UI), Extended Unemployment Compensation (EUC), Extended Benefits (EB), Combined Wage Claims (CWC), Unemployment Compensation for Ex-Service Members (UCX), Unemployment Compensation for Federal Employees (UCFE), Self-Employment Assistance Program (SEAP), Trade Readjustment Allowances (TRA) and the 599 training program.
No, not generally. An exception would occur if the employer did not respond to the Department inquiries timely or with adequate information, and an overpayment to a claimant resulted. In this case, the charge would remain on the employer's account for those benefits already paid to the claimant.
A person who is retired and not seeking employment is not eligible for Unemployment Insurance benefits. A person who is retired and actively seeking work may be eligible for benefits under the same conditions as other workers.
The weekly benefit rate will be reduced by 100% of the amount of the pension if a base period employer contributed to it, even if the former employee contributed to the pension. The weekly benefit rate will not be reduced if the former employee was the sole contributor to the pension.
A claimant's benefit rate could be reduced if they received a payment from a 401(k) to which an employer contributed, if that employer is a base period employer. This would apply if the claimant receives periodic 401(k) payments or if the claimant is unemployed due to retirement but remains active in the workforce and receives a lump sum payment. The pension reduction applies to a governmental or other pension, retirement pay, annuity or any other similar periodic payment which is based on previous work.
The Department of Labor's Employer Services hotline can be reached at (888) 899-8810. We will answer your question or direct you to the services and help you need. For example, we can answer questions about notices you may have received, your rights under Unemployment Insurance law concerning hearings, how to report fraud and more.
For more information about Unemployment Insurance, please check publication NYS 50 published by the New York State Department of Taxation and Finance: Employer's Guide to Unemployment Insurance, Wage Reporting, and Withholding Tax. You can find it online at www.tax.ny.gov/pdf/publications/withholding/nys50.pdf.
For more information on hearings, please check the employer guide Hearings Before Unemployment Insurance Administrative Law Judges: Questions and Answers published by the Unemployment Insurance Appeal Board. It is available on our website at www.labor.ny.gov/formsdocs/ui/UI_Hearing_Employer.pdf.