Do companies have to pay for unemployment benefits - confused about how NYS Department of Labor funding works
I got laid off from my warehouse job last month and just started getting unemployment benefits. My former coworker told me that our old company has to pay for my unemployment directly, but that doesn't sound right to me? I thought unemployment came from taxes or something. Does anyone know how this actually works with NYS Department of Labor? Are companies responsible for paying unemployment benefits to their former employees?
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Miguel Castro
Your coworker is partially right but it's more complicated. Companies in NY pay unemployment insurance taxes to fund the system, but they don't pay your benefits directly. The NYS Department of Labor collects these taxes from employers and uses that money to pay unemployment benefits. Your specific claim might affect your former employer's tax rate in future years though.
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Ava Williams
•Oh okay that makes more sense! So the company isn't writing me a check each week, it's coming from the state fund that employers pay into?
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Zainab Ibrahim
Companies pay unemployment insurance premiums based on their payroll and their experience rating (how many former employees have filed claims). If you were laid off for legitimate reasons like downsizing, it shouldn't be a big deal for them. But if lots of people file unemployment claims against the same company, their rates can go up significantly.
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Connor O'Neill
•This is why some employers try to fight unemployment claims even when they're valid - they're worried about their rates going up.
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LunarEclipse
Wait so if I file for unemployment my old boss has to pay more taxes next year?? I feel kinda bad now, they were actually pretty good to work for before the layoffs happened.
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Miguel Castro
•Don't feel bad! This is exactly what unemployment insurance is for. If you were laid off through no fault of your own, you deserve these benefits. The employer knew they were paying into this system when they hired you.
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Yara Khalil
I had trouble reaching NYS Department of Labor when I had questions about this same thing. Ended up using Claimyr to get through to an actual agent who explained the whole system to me. There's a demo video at https://youtu.be/qyftW-mnTNI if you want to see how it works. Way easier than sitting on hold for hours.
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Ava Williams
•Thanks for the tip! I might need to try that if I have more questions about my claim.
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Keisha Brown
basically companies pay unemployment taxes quarterly and its based on how many ppl they laid off in the past few years... if they lay off tons of ppl their rates go way up but if they rarely have claims their rates stay low
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Paolo Esposito
Yeah I remember when I worked in HR we always had to budget for unemployment insurance costs. It's just part of doing business, like workers comp insurance.
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Andre Lefebvre
Just to add some specific numbers - in NY the unemployment insurance tax rate for employers ranges from 0.6% to 9.9% of their payroll depending on their experience rating. New employers start at around 4.1%. So yes, your claim might bump up their rate slightly in future years, but that's literally what the system is designed for. Don't feel guilty about using benefits you're entitled to!
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Isabella Martin
•Wow, those specific tax rates are really helpful to understand! So even in the worst case scenario, companies are only paying less than 10% of payroll for unemployment insurance? That actually doesn't seem like a huge burden for legitimate layoffs. Makes me feel better about claiming my benefits.
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