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December 11, 2013

New York State Department of Labor Unemployment Insurance Reform

Citing the need for "a fairer, more sustainable Unemployment Insurance system for employers and claimants," the New York State Department of Labor ("NYSDOL") has begun implementing the legislative reforms signed by Governor Cuomo, effective as of October 1, 2013. The law attempts to rescue the Unemployment Insurance Trust Fund from insolvency by increasing the "wage base" upon which employers are assessed UI tax and eliminating the lowest contribution rates. It also makes it tougher for claimants to qualify for and continue receiving unemployment benefits and for employers to be relieved of charges due to overpayment. It does, however, increase benefits for those who qualify.

Changes for Employers

Generally, employers can expect to pay more in unemployment contributions starting in 2014. Specifically, the changes:

  • Increase the "wage base" upon which the employer's Unemployment Insurance contribution is assessed. Beginning January 1, 2014, the wage base will increase to $10,300. This figure is set to increase $200-300 every year until 2026, when it will become 16% of the state's average annual wage. See New York Labor Law § 581(1)(a).
  • Omit the six lowest contribution rates, specifically for employers with positive account percentages of 10.75% or more. See New York Labor Law § 581(2)(a).
  • Allow NYSDOL to retain an employer's overpayment if the employer is late in responding to NYSDOL inquiries, or responds with insufficient information. See New York Labor Law § 581(1)(e); § 597(2)(d).

Changes for Claimants

Generally, the reforms make it more difficult for claimants to qualify for and maintain unemployment benefits. Specifically, the changes:

  • Eliminate or reduce unemployment benefits for claimants who also receive severance pay, dismissal pay, or employer-funded pension benefits. See New York Labor Law § 591.
  • Eliminates eligibility for claimants "not actively seeking work." In order to be "actively seeking work" a claimant must be making "systematic and sustained efforts" to find work, which shall – among other things – include contacting at least two prospective employers for each week claimed. See New York Labor Law § 591(2). The NYSDOL intends to step up monitoring and enforcement efforts to combat fraud as well.
  • Requires a claimant who voluntarily separates from employment without good cause, is terminated for misconduct, or refuses to accept an offer of employment (for which he or she is reasonably fitted) to work and earn at least ten times his or her weekly benefit rate before re-qualifying for benefits. See New York Labor Law § 593(1)-(3).
  • Increases weekly benefits for claimants. In October 2014, the minimum weekly benefit will increase from $65 to $100, and the maximum weekly benefit will increase from $405 to $420, and then proportionally thereafter. See New York Labor Law § 590(5).

See generally

If you have any questions, please contact the Hiscock & Barclay lawyer with whom you normally work or any attorney in our Labor & Employment practice area.


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