What's happening
This bill increases the maximum unemployment insurance benefit rate and wages subject to unemployment insurance in New York.
Why it matters
Raises the wage base for unemployment insurance taxes more quickly and to a higher level than previously scheduled, meaning employers will pay unemployment insurance taxes on a larger portion of each employee’s wages, which could impact payroll costs for businesses.
Accelerates and increases the maximum weekly unemployment benefit amount, providing more immediate and substantial financial support to unemployed workers, which could help stabilize household incomes during periods of job loss.
Moves from a gradually escalating benefit schedule tied to a percentage of the state’s average weekly wage to a faster timeline reaching 50% of that average by 2021, which could make New York’s unemployment benefits more competitive with other states and potentially strengthen the social safety net.
Requires the Department of Labor to annually recalculate the wage base and funding needs to ensure the unemployment insurance trust fund can sustainably support the higher benefits, potentially making the system more responsive to future economic conditions but also subjecting employers to more frequent rate changes.
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Who cares
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Raise Unemployment Benefits
Plain English, a few words. Used as the page title.
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History
- Referred to labor
- Referred to labor
Full text
3 pagesUnderlined is new[Struck] is removedOfficial text on nysenate.gov ↗
STATE OF NEW YORK
431
2017-2018 Regular Sessions
IN SENATE (Prefiled)
January 4, 2017
Introduced by Sen. PERALTA -- read twice and ordered printed, and when printed to be committed to the Committee on Labor
AN ACT to amend the labor law, in relation to the unemployment insurance law, increasing the maximum benefit rate for unemployment insurance
The People of the State of New York, represented in Senate and Assembly, do enact as follows:
Section 1. Paragraph (a) of subdivision 1 of section 518 of the labor law, as amended by section 1 of part O of chapter 57 of the laws of 2013, is amended to read as follows:
(a) "Wages" means all remuneration paid, except that such term does not include remuneration paid to an employee by an employer after eight thousand five hundred dollars have been paid to such employee by such employer with respect to employment during any calendar year, except that such term does not include remuneration paid to an employee by an employer with respect to employment during any calendar year beginning with the first day of
that exceeds
January 2014 $10,300
January 2015 $10,500
January 2016 $10,700
January 2017 $10,900
January 2018 [$11,100] $12,500
January 2019 [$11,400
January 2020 $11,600
January 2021 $11,800
January 2022 $12,000
January 2023 $12,300
January 2024 $12,500
January 2025 $12,800
January 2026 $13,000
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD00059-01-7
S. 431 2
and each year thereafter on the first day of January that exceeds sixteen percent of the state's average annual wage as determined by the commissioner on an annual basis pursuant to section five hundred twenty-nine of this article; provided, however, that in calculating such maximum amount of remuneration, the amount arrived at by multiplying the state's average annual wage times sixteen percent shall be rounded up to the nearest hundred dollars. In no event shall the state's annual average wage be reduced from the amount determined in the previous year] $13,500
In each succeeding calendar year, the department shall calculate the base amount of remuneration necessary from which to produce sufficient premium to provide for the annual increases in maximum weekly benefit provided for in this article, and other funding for the unemployment insurance trust fund pursuant to section five hundred fifty of this article, as may be necessary. The term "employment" includes for the purposes of this subdivision services constituting employment under any unemployment compensation law of another state or the United States.
§ 2. Paragraph (a) of subdivision 5 of section 590 of the labor law, as amended by section 8 of part O of chapter 57 of the laws of 2013, is amended to read as follows:
(a) A claimant's weekly benefit amount shall be one twenty-sixth of the remuneration paid during the highest calendar quarter of the base period by employers, liable for contributions or payments in lieu of contributions under this article, provided the claimant has remuneration paid in all four calendar quarters during his or her base period or alternate base period. However, for any claimant who has remuneration paid in all four calendar quarters during his or her base period or alternate base period and whose high calendar quarter remuneration during the base period is three thousand five hundred seventy-five dollars or less, the benefit amount shall be one twenty-fifth of the remuneration paid during the highest calendar quarter of the base period by employers liable for contributions or payments in lieu of contributions under this article. A claimant's weekly benefit shall be one twenty-sixth of the average remuneration paid in the two highest quarters paid during the base period or alternate base period by employers liable for contributions or payments in lieu of contributions under this article when the claimant has remuneration paid in two or three calendar quarters provided however, that a claimant whose high calendar quarter is four thousand dollars or less but greater than three thousand five hundred seventy-five dollars shall have a weekly benefit amount of one twenty-sixth of such high calendar quarter. However, for any claimant who has remuneration paid in two or three calendar quarters during his or her base period or alternate base period and whose high calendar quarter remuneration during the base period is three thousand five hundred seventy-five dollars or less, the benefit amount shall be one twenty-fifth of the remuneration paid during the highest calendar quarter of the base period by employers liable for contributions or payments in lieu of contributions under this article. Any claimant whose high calendar quarter remuneration during the base period is more than three thousand five hundred seventy-five dollars shall not have a weekly benefit amount less than one hundred forty-three dollars. The weekly benefit amount, so computed, that is not a multiple of one dollar shall be [lowered to] the next multiple of one dollar. On the first Monday of September, nineteen hundred ninety-eight the weekly benefit amount shall not exceed three hundred sixty-five dollars nor be less than forty dollars, until the first Monday of September, two thousand, at which
S. 431 3
time the maximum benefit payable pursuant to this subdivision shall equal one-half of the state average weekly wage for covered employment as calculated by the department no sooner than July first, two thousand and no later than August first, two thousand, rounded [down] to the [lowest] next dollar. On and after the first Monday of October, two thousand fourteen, the weekly benefit shall not be less than one hundred dollars, nor shall it exceed four hundred twenty dollars until the first Monday of October, two thousand fifteen when the maximum benefit amount shall be four hundred twenty-five dollars, until the first Monday of October, two thousand sixteen when the maximum benefit amount shall be four hundred thirty dollars, until the first Monday of [October] July, two thousand seventeen when the maximum benefit amount shall be four hundred [thirty-five] seventy-five dollars, until the first Monday of [October] July, two thousand eighteen when the maximum benefit amount shall be [four] five hundred [fifty] twenty-five dollars, until the first Monday of [October] July, two thousand nineteen when the maximum benefit amount shall be [thirty-six percent of the average weekly wage] six hundred dollars, until the first Monday of [October] July, two thousand twenty when the maximum benefit amount shall be [thirty-eight percent of the average weekly wage, until the first Monday of October two thousand twenty-one when the maximum benefit amount shall be forty percent of the average weekly wage, until the first Monday of October, two thousand twenty-two when the maximum benefit amount shall be fortytwo percent of the average weekly wage, until the first Monday of October, two thousand twenty-three when the maximum benefit amount shall be forty-four percent of the average weekly wage, until the first Monday of October, two thousand twenty-four when the maximum benefit amount shall be forty-six percent of the average weekly wage, until the first Monday of October, two thousand twenty-five when the maximum benefit amount shall be forty-eight percent of the average weekly wage, until the first Monday of October, two thousand twenty-six and each year thereafter on the first Monday of October when the maximum benefit amount shall be fifty percent of the average weekly wage provided, however, that in no event shall the maximum benefit amount be reduced from the previous year] six hundred fifty dollars, until the first Monday of July, two thousand twenty-one, when the maximum benefit amount shall equal onehalf of the state average weekly wage as calculated by the department no sooner than July first, two thousand twenty-one and not later than August first, two thousand twenty-one and on July first of each succeeding year the maximum benefit shall equal one-half of the state average weekly wage as calculated by the department annually pursuant to the manner described in this subdivision. For purposes of this subdivision, the term "state average weekly wage" shall mean the average weekly wage of the state for the previous calendar year as reported by the commissioner to the superintendent of financial services on March thirty-first.
§ 3. This act shall take effect immediately and shall apply to all claims filed on and after the effective date of this act; provided, however, that section one of this act shall take effect on the thirtieth day after it shall have become a law.
Reflowed for reading: line numbers and page breaks removed. Cite the official text.
Sponsor's memo
Title of bill
An act to amend the labor law, in relation to the unemployment insurance law, increasing the maximum benefit rate for unemployment insurance
Purpose
The bill intends to increase the maximum weekly unemployment benefit rate and restore fiscal health to the state's Unemployment Insurance Trust Fund.
Summary of provisions
Section one of the bill amends section 518 of the Labor Law to gradually increase the taxable wage base for employer contributions to the Unemployment Insurance Trust fund until 2018, after which the Department of Labor would calculate the wage base needed to fund annual increases for the maximum weekly benefit.
Read the full memo (924 words)
Section two of the bill amends section 590 of the Labor Law to increase in the maximum weekly unemployment benefit rate to $475 as of July 2016, to $525 as of July 2014, to $600 as of July 2017, to $650 as of July 2019, after which the maximum weekly benefit would equal one-half of the state average weekly wage as annually calculated by the State Department of Labor.
Section three establishes the effective date.
Justification
New York State's unemployment rate reached 8.8% in January 2010 with more than 851,970 New Yorkers out of work. In the New York City metropolitan area, the rate is over 10%, and disproportionately higher for Hispanics at 23% and 38.7% for African-Americans. The State's long-term unemployment rate, which tracks those who are unemployed for 27 weeks or more, was 34% in 2009 exceeding the national average of 31.5%.
The State's unemployment benefit rate and taxable wage base have not been raised since 1998. Due to the large number of persons filing for unemployment benefits, the Unemployment Insurance Trust Fund has become insolvent. The State has had to borrow from the federal government to pay benefits and will owe more than $3.5 billion by the end of the year. This deficit is expected to rise by an additional $1 billion during each of the next few years if nothing is done to address the problem.
The limited amount of stimulus funds provided under the American Recovery and Reinvestment Act of 2009 (ARRA) does not resolve this long-term crisis to the Trust Fund. Both employers and the State will face significant new costs if the Trust Fund is not restored to fiscal health. The continued insolvency of the Fund will result in higher federal unemployment taxes for employers. When the Fund is solvent, employers may receive a federal credit reduction against the 6.2% federal tax they pay under the Federal Unemployment Trust Act (FUTA), which reduces their tax liability to .8%. When the Fund lacks sufficient contributions to repay borrowed money by the federal deadlines, the FUTA credit is reduced, which increases the net federal tax rate for employers. without this legislation, the increased tax cost to New York employers is projected to reach $6.4 billion during the period of 2009-2018.
The failure to increase the taxable wage base will also cost the State millions of dollars in interest on its federal loan. Under the bill, however, the State's interest on the loan would continually decline until 2016, when the Trust Fund's solvency would be restored. New York's taxable wage base of $8500 is significantly lower than most other states, including New Jersey ($29,700), Connecticut ($15,000) and Massachusetts ($14,000).
The legislation would also increase the maximum weekly benefit rate of $405 which was enacted more than a decade ago. Since then, the spending power of $405 has declined by more than 20% to approximately $322. The current benefit rate is based on one-half of the state's average weekly wage in 1998. if this rate were adjusted to the current average weekly wage, the benefit would be closer to $575. The legislation proposes a more modest increase in the initial years following enactment in an effort to strike a balance between the need to increase benefits and raise employer contributions. New York's current benefit level places many unemployed workers and their families below the poverty threshold. The state's weekly benefit rate is much lower than that of nearby states including New Jersey ($600), Connecticut ($537), and Massachusetts ($628). In Oregon, which indexes unemployment benefits to keep pace with inflation, the benefit was increased to $493 two years ago.
The need to raise unemployment benefits and the taxable wage base grows more urgent each year. Because benefits have not been increased, workers who have recently received extended unemployment benefits from the federal government have been deprived of additional income they and their families need at this difficult time. The failure to act also hurts local economies. Studies show that every dollar provided to workers returns approximately $1.64 through local purchases for rent, food and other basics, which in turn helps local businesses and generates tax revenues.
The unemployment system was established to help New Yorkers support themselves after they lose their jobs through no fault of their own until they can find new work. This legislation will protect New York's unemployment system by ensuring the fiscal health of the Trust Fund, and in so doing, help avoid new costs for employers and the State if solvency of the Fund is not restored.
Legislative history
2015-2016-S1117A 2013-2014 S.36-A 2011-12: S.673-A 2010: S.2245-B Advanced to 3rd Reading 2009: S.2245 - Advanced to 3rd Reading A.4921 Advanced to Ways & Means 2008: S.8742 - Referred to Rules A.11642 Advanced to Ways & Means
Effective date
This bill will take effect immediately, provided that section one will take effect 30 days after it becomes law.
Summaries, headlines and scores are AI-generated from the official bill text. How we score bills. Source: NYS Open Legislation.