Relates to the creation of the long term unemployment work and training program

Title of bill

An act to amend the labor law, in relation to creating a subsidized long term unemployment work and training program

Purpose

The Labor Law is amended by adding a new Article 18-A, creating the Long Term Unemployment Work and Training Program, to encourage job creation, reduce New York State's long-term unemployed, and provide assistance to small businesses through partially subsidized full-time employment and training programs.

Summary of provisions

Section 1 of the bill adds a new Article 18-A, (new § 644-649) to the Labor Law, creating the Long Term Unemployment Work and Training Program, as follows:

Section 644 provides definitions.

Section 645 creates the Subsidized Training and Employment Program within the Department of Labor, providing a grant subsidy for small businesses and manufacturers for the first year after a new, previously long-term unemployed person is hired.

Section 646 provides a description of the grant, which is not to exceed the rate of $20 per hour, and is applied on a sliding scale basis with quarterly decrements: 100% for the first quarter; 75% for the second quarter; 50% for the third quarter; and 25% for the final quarter. The total amount of the grant cannot exceed $21,000.

Section 647 provides for the grant application.

Section 648 requires the Commissioner of Labor to report data on the Program to the Legislature.

Section 649 directs the commissioner to promulgate all rules and regulations necessary to establish and implement the program.

Section 2 of the bill provides the effective date.

Justification

At 39.1%, New York's long-term unemployment rate was among the highest in the country in 2014, ranking 8th among the 50 states and the District of Columbia,* despite the fact that those facing long-term unemployment are likely to have the strongest desire to enter the labor force.** Programs to assist businesses to hire formerly unemployed workers by providing a limited subsidy of a new employee's wages have been shown to increase employment and earnings, not only during the subsidy period but also after the program ends.*** These programs are particularly helpful to small businesses,**** which otherwise have the least capacity to take on the risk of a new hire. This legislation takes a two-pronged approach by addressing the needs of long-term unemployed and matching them with small businesses with limited resources.

Legislative history

New Bill.

Fiscal implications

Each grant is not to exceed $21,000 per year. A $20 million appropriation would provide a minimum of 950 jobs statewide. EFFECTIVE DATE : This act shall take effect immediately. * Bureau of Labor Statistics. Long-term unemployment is the percentage of unemployed who were jobless for 27 weeks or longer.Higher unemployment and lower job creation rates make unemployment a persistent problem upstate, as shown at New York State Department of Labor http://www.labor.ny.gov/stats/pdfs/urmap.pdf **Federal Reserve Bank of NY. "Measuring Labor Market Slack: Are the Long-Term Unemployed Different?" (2014). *** Pavetti, L. "Subsidized Jobs: Providing Paid Employment Opportunities When the Labor Market Fails." Center on Budget and Policy Priorities. April 2014. **** See, e.g., Roder, A. and Elliot, M. "Stimulating Opportunity: An Evaluation of ARRA-Funded Subsidized Employment Programs." Economic Mobility Corporation. September 2013.