What's happening
This bill sets a specific unemployment insurance contribution rate for 2026 and creates a reserve fund to stabilize unemployment insurance finances during economic downturns.
Why it matters
Limits employer contribution rates for 2026. By setting a cap on unemployment insurance contribution rates for 2026, the bill provides employers with more predictable costs, which can help with business planning and potentially reduce financial strain during economic recovery periods.
Creates a dedicated reserve fund. Establishing the Unemployment Insurance Solvency Reserve Fund means New York will have a financial buffer specifically for periods when the unemployment insurance system is under stress, reducing the likelihood of abrupt increases in employer taxes or benefit cuts during downturns.
Allows use of flexible funding sources. The new fund can be filled with a variety of sources, including federal recovery funds and settlement proceeds, increasing the state’s agility in responding to economic crises and lessening reliance on borrowing.
Targets federal loan repayment costs. The reserve fund is only to be used when New York’s unemployment fund borrows from the federal government and faces federal surcharges or principal repayments, aiming to protect employers from additional costs and stabilize the unemployment insurance system during severe downturns.
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Who cares
Employers paying unemployment insurance contributions
Qualified employers would receive 2026 fiscal-year contribution rates based on a fund index of at least five percent, unless the actual index yields a lower rate.
State budget officials and lawmakers
The bill would establish a solvency reserve that could receive designated federal recovery funds, non-recurring state funds including settlement proceeds, and statutory appropriations or transfers.
Unemployment insurance claimants and worker advocates
The reserve would be available only when the unemployment insurance fund has borrowed federally to pay benefits, federal interest charges have been imposed on New York, and the federal government is recovering loan principal.
Headline styles
Create Jobless Fund Reserve
Plain English, a few words. Used as the page title.
Sponsors
History
- Referred to labor
- Referred to labor
Full text
2 pagesUnderlined is new[Struck] is removedOfficial text on nysenate.gov ↗
STATE OF NEW YORK
210
2025-2026 Regular Sessions
IN SENATE (Prefiled)
January 8, 2025
Introduced by Sens. HELMING, BORRELLO, CANZONERI-FITZPATRICK, GALLIVAN, LANZA, OBERACKER, TEDISCO -- read twice and ordered printed, and when printed to be committed to the Committee on Labor
AN ACT to amend the labor law and the state finance law, in relation to employer contributions to the unemployment insurance fund and establishing the unemployment insurance solvency reserve fund
The People of the State of New York, represented in Senate and Assembly, do enact as follows:
Section 1. Section 581-a of the labor law is amended by adding a new subdivision 3-a to read as follows:
3-a. Notwithstanding the provisions of section five hundred eighty-one of this title to the contrary and notwithstanding the actual size of the fund index, the rate of contribution for a qualified employer in the two thousand twenty-six fiscal year shall be the percentage shown in the column headed by the size of the fund index at five percent or more and on the same line with such qualified employer's negative or positive employer's account percentage pursuant to subdivision two of section five hundred eighty-one of this title, unless using the actual size of the fund index would result in a lower rate of contribution for an employer, in which case such employer shall be liable for such lower rate of contribution.
§ 2. The state finance law is amended by adding a new section 92-kk to read as follows:
§ 92-kk. Unemployment insurance solvency reserve fund. 1. There is hereby established in the state treasury a fund to be known as the "unemployment insurance solvency reserve fund". Such fund shall consist of moneys deposited there and moneys shall be withdrawn from such fund only for the purposes as provided therein.
2. Such fund may consist of but not be limited to, discretionary federal funds designated as recovery funds during a period of economic
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD00704-01-5
downturn and non-recurring state funds derived from settlement proceeds and other sources.
3. Such fund may also consist of amounts appropriated or transferred pursuant to statute.
4. The amounts available in such reserve may be used if the following conditions are met:
(a) The unemployment insurance fund has borrowed money from the federal government for the purpose of paying benefits to claimants;
(b) The federal government has imposed an interest assessment surcharge on the state of New York for loans to the unemployment insurance fund; and
(c) The federal government is recovering the principal on money loaned to the unemployment insurance fund for the payment of benefit to claimants.
§ 3. This act shall take effect immediately.
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 and the state finance law, in relation to employer contributions to the unemployment insurance fund and establish- ing the unemployment insurance solvency reserve fund
Purpose
This bill aims to provide predictability and surety to small businesses in terms of their expected contributions to the unemployment insurance fund and also to establish a reserve fund to bolster unemployment when needed and ensure its solvency.
Summary of provisions
Section 1. Establishes the employer contribution rate for the unemploy- ment insurance fund in state beginning in 2024 and describes the formu- lary
Section 2 Establishes an unemployment insurance solvency reserve fund and identifies monies that may now be available or may be available in the future for deposit in such fund.
Section 3. This act shall take effect immediately
Justification
New York's unemployment system paid out more than $100 billion to quali- fied New Yorkers during 2020 and 2021 in response to closures related to the global pandemic. 4.7 million New Yorkers received benefits for all or some portion of that period. Unfortunately, in the rush to help struggling citizens our unemployment funds payments exceeded its assets. As of October 2024, New York State still owes the Federal Government $6 billion, and employers are paying an additional $15 per employee just to account for interest on this debt. Total unemployment insurance costs per employee average between $400 and $450 per employee. These costs place a significant burden on businesses, especially small businesses, and Empire State Development has recently testified that the number of small businesses in New York State decreased by at least 3% between 2019 and 2024.
Small Businesses did not create this deficit, and they should not be asked to sacrifice any more money, simply because the state is unable to track its own expenditures and balance its own books. This legislation would establish in law a fixed contribution from employers to the unem- ployment insurance fund. Further, it would create a solvency fund in State Finance law, that could draw on other state revenues, settlement dollars or unencumbered Federal funds. We cannot place any more burdens on small employers. Instead, we must make their rates more predictable and put our own fiscal house in order. This bill would assist on both counts.
Legislative history
2023-2024: S.4551 referred to Labor/ A.4657 referred to Labor
2021-2022: S.7431 referred to Labor/A.8627 held for consideration in Labor
Fiscal implications
To be determined.
Effective date
This act shall take effect immediately.
Summaries, headlines and scores are AI-generated from the official bill text. How we score bills. Source: NYS Open Legislation.