Employers Should Be Aware of Unemployment Insurance Reform in New York

New York State has enacted several changes to the laws regarding unemployment insurance. The changes are the result of the insolvency of the State’s Unemployment Insurance Trust Fund and the State’s need to repay the federal government $3.5 billion borrowed to cover increased costs incurred during the recession. The New York State Department of Labor (“NYSDOL”) has issued two fact sheets — one directed toward employers and one directed toward claimants — concerning these changes in the law. Certain of the important revisions affecting employers are identified below.

  1. Under the new law, the payment of severance to an employee, in an amount exceeding the maximum weekly benefit (which is currently $405 per week), will preclude an employee from receiving unemployment insurance benefits. However, unemployment insurance benefits will be available if the severance is not paid out until thirty days after the employee’s last day of employment.
  2. The law has been amended to provide that employers who submit incomplete or late submissions to NYSDOL regarding the agency’s request for information concerning a claim for benefits will not be relieved of any charge to its account, even where the agency later determines that the employee was ineligible for benefits or received an overpayment. Employers must complete fully and return the agency’s request for information by the date specified by NYSDOL.
  3. The new law increases an employer’s contributions based on the Federal Unemployment Tax Act. Specifically, under current law, this employer tax is based upon the number of employees and the employer’s experience rating. However, the tax is assessed only on the first $8,500 of each employee’s earnings. Beginning January 1, 2014, the tax will be assessed on the first $10,300 of each employee’s earnings and this amount will rise gradually each year moving forward.
  4. Finally, the law requires employees to be “actively seeking work” in order to be eligible for benefits. Currently, the law eliminates benefits only for those who are not capable of work, or are not “ready, willing and able to work.” The revised law defines “actively seeking work” as being “engaged in systematic and sustained efforts to find work.” The revised law also requires the agency to promulgate regulations on the issue and to set standards of proof necessary to establish these work efforts.