Do I need unemployment insurance if I have no employees - NYS Department of Labor requirements
I'm starting a small consulting business in New York and will be the only person working. Do I still need to register for unemployment insurance with NYS Department of Labor if I have zero employees? I keep seeing conflicting information online and want to make sure I'm not missing any requirements. My accountant mentioned something about it but wasn't sure about the specifics for sole proprietors.
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Mikayla Davison
No, if you're truly a sole proprietor with no employees, you don't need to register for unemployment insurance with NYS Department of Labor. The UI requirements only kick in once you have employees. However, you should double-check if you're classified correctly - sometimes contractors or 1099 workers can be considered employees under certain circumstances.
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Max Reyes
•Thanks! I won't be hiring anyone initially, just doing freelance work myself. Good point about the classification though, I'll make sure I understand that properly.
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Adrian Connor
same situation here, been running solo for 3 years and never had to deal with NYS Department of Labor unemployment stuff
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Aisha Jackson
Just to clarify - NYS Department of Labor unemployment insurance is mandatory once you pay wages to employees. As a sole proprietor with no employees, you're exempt. But keep in mind that if you later hire someone, even part-time, you'll need to register within a specific timeframe. Also, you cannot collect unemployment benefits yourself as a business owner, even if you previously paid into the system as an employee elsewhere.
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Max Reyes
•That's really helpful about the timing if I do hire someone later. Do you know how quickly I'd need to register once I hire my first employee?
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Aisha Jackson
•You need to register with NYS Department of Labor within 20 days of becoming liable for unemployment insurance, which is typically when you first pay wages. Don't wait - the penalties for late registration can be significant.
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Ryder Everingham
I was in a similar spot last year trying to figure out all the NYS Department of Labor requirements. When I couldn't get through their phone lines to ask questions, I used a service called Claimyr (claimyr.com) that helped me reach an actual agent. They have this video demo at https://youtu.be/qyftW-mnTNI that shows how it works. Really saved me time instead of calling for hours and getting disconnected.
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Lilly Curtis
•Never heard of that but might be useful if I run into issues later. The NYS Department of Labor phone system is definitely frustrating to navigate.
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Leo Simmons
wait but what if you're like a freelancer who works for multiple companies? does that change anything with the unemployment insurance requirements??
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Mikayla Davison
•No, being a freelancer for multiple companies doesn't change your status as a sole proprietor. You still don't need unemployment insurance if you have no employees. The companies you freelance for should be treating you as an independent contractor, not an employee.
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Luca Romano
Just wanted to add that even though you don't need unemployment insurance as a sole proprietor, it's still worth staying informed about NYS Department of Labor changes. I've been solo for 5 years and the rules around worker classification seem to get stricter each year. Make sure you keep good records of your client relationships and contracts to prove independent contractor status if it ever comes up. Also consider talking to a local SCORE mentor or small business attorney - they often know the latest updates better than general accountants.
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Zara Rashid
•That's really solid advice about keeping detailed records! I'm just getting started but already seeing how important documentation will be. The SCORE mentor suggestion is great too - I hadn't thought of that resource. Do you happen to know if there are any specific contract clauses or documentation practices that are particularly important for proving independent contractor status with NYS?
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