Relates to the elimination of employer unemployment contributions for employees fired for misconduct

Summary

Section 1 adds clause (vi) to subparagraph 2 of paragraph (e) of subdi- vision 1 of section 581 of the labor law to exclude employers who termi- nate as a result of misconduct or good cause from the experience rating.

Section 2 adds a new subdivision (2-a) to section 581 of the labor law to exclude employers who terminate as a result of misconduct or good cause.

Section 3 adds a new section (594-a) to the labor law to ensure a claim- ant who has been fired for misconduct or good cause within their base period sees a reduction in benefits that correlates with that employment period.

Section 4 amends subdivision 3 of section 593 of the labor law to ensure the claimant who was fired fox misconduct does not collect based from the general account in the event he/she has been fired for misconduct or good cause.

Section 5 adds a new section (593-a) of the labor law for misconduct hearings and determinations. Under this new section, an employer will have ten days to object to a claim and the Department has thirty days to have a final determination hearing.

Section 6 provides the enacting clause.

Justification

Under Section 593.3 of the labor law, if an unemployment claimant lost employment prior to the filing of her/his claim through misconduct in connection with his/her employment, she/he is disqualified from benefits beginning with such loss of employment and ending when he/she has worked in subsequent employment and earned remuneration at least equal to five times her/his weekly benefit rate. Any wages earned through employment which ended due to misconduct in connection with that employment cannot be used to establish a valid original claim for bene- fits.

However, if that claimant obtains a new position and is let go in a non-disqualifying way, she/he may be eligible to collect benefits. In that instance, the original terminating employer is charged a debit in accordance with section 581 of the labor law.

The need for clarification in the law was recently highlighted in two decisions made by the Appellate Division in the 3rd Judicial Department. In the Matter of Perry (Summit Security Systems Inc.) and Matter of Christy (Aspire of Western NY), Judge Peters explains the necessity of a "final determination" of misconduct being made by the Department on the claimant's prior termination in order to exclude the employer from an experience rating charge to their account. Likewise, the court decided the same determination should be made in order to exclude wages earned from employers from whom the claimant lost employment under conditions which would be disqualifying.

This bill amends the labor law so that in instances where the claimant has been denied unemployment benefits due to termination for misconduct, the terminating employes will have an opportunity to object and be excluded from the base period of employers used in calculating a valid original claim and therefore not be charged a debit on the claim of the terminated claimant.

With genuine unemployment claims increasing, it is especially important to create policies that protect businesses from illegitimate and unde- served claims.

Legislative history

S6850 of 2012 - referred to labor

Fiscal implications

Significant cost savings are anticipated for busi- nesses as well as the State and Federal governments.

Effective date

This act shall take effect immediately.