Relates to the calculation of weekly unemployment insurance and the repeal of certain provisions relating thereto

2 Co-sponsors

• Tony Avella
• Terry Gipson

BILL NUMBER:S6572

Title of bill

An act to amend the labor law, in relation to the calculation of weekly employment insurance benefits for workers who are partially unemployed; and repealing certain provisions of such law relating thereto

Purpose or general idea of bill

To ensure that partially unemployed workers have meaningful access to unemployment insurance benefits.

Summary of specific provisions

This bill amends various sections of Article 18 of the labor law in order to:

(1)replace the current system for determining eligibility for partial unemployment insurance benefits with a system that is based on the claimant's weekly earnings rather than the number of days the claimant worked during the week;

(2) establish a system of calculating partial unemployment insurance benefits that disregards a portion of part-time earnings before reducing benefits by one dollar for each dollar of earnings up to the full weekly benefit amount; and

(3) provide that any individual who earns significant part-time earnings on a single day during the week, up to the maximum allowable amount, will receive a partial benefit equal to three-quarters of his or her full weekly benefit amount.

Justification

By imposing a 25-percent reduction to a claimant's full benefit for any work performed on a single day, New York's unemployment insurance (UI) program fails to provide an adequate level of income security for workers experiencing reductions in their usual hours and earnings; at the same time, it creates perverse incentive that may discourage claimants from returning to part-time work, particularly for three days or more.

The adverse consequences of current law are two-fold: during a time when businesses are still suffering from lack of customers, New York's UI program is inadvertently suppressing local economic activity and job creation by denying benefits to the very people who need and will quickly spend them. UI benefits are among the most effective forms of economic stimulus, generating between $1.61 and $2.00 of additional activity for every dollar allocated. Furthermore, many of New York's current claimants are afraid they will end up financially worse off by accepting a part-time job. This can be risky as the worker's professional skills may languish and the fact of extended unemployment may itself become an obstacle to reemployment.This disincentive has significant cost implications for the state's UI trust fund.

This legislation is modeled on partial unemployment insurance requirements in Connecticut and Pennsylvania which permit claimants to

earn more than the value of their full benefit for a week of part-time work; similarly, these states disregard an amount of part-time earnings that is tied to the claimant's full benefit.

This bill represents a necessary step towards ensuring that New York's UI program provides partially unemployed workers with the support they need to meet their most basic needs. Not addressing the current system inequities in an economy with a persistently high number of part-time jobs may compromise the health of the UI trust fund by discouraging part-time reemployment and by suppressing the very consumer demand New York's economy requires in order to return to full employment.

Prior legislative history

A.11490 of 2009-2010: Reported to Ways and Means; A.6139 of 2011-2012: Reported to Ways and Means (Same as S.4929: Referred to Labor); A.7278 of 2013-2014: Referred to Labor (Same as S.3393: Referred to Labor)

Fiscal implications

Preliminary analysis finds that this plan may generate cost savings for the trust fund if claimants are returning to work more quickly. Increased costs for those who become eligible under the new requirements may partially offset these savings. We recommend asking the New York State Department of Labor to estimate these costs for the Assembly.

Effective date

Immediately.