Do you have to pay unemployment if you fire someone in NY - employer obligations?
Small business owner here and I'm confused about NYS Department of Labor requirements. If I have to terminate an employee for performance issues (not misconduct, just not meeting expectations), am I required to pay into their unemployment benefits? I know I pay into the UI system already but does firing someone automatically make me liable for their claim? The employee has been with us for 8 months and I've documented the performance problems. Just want to understand my obligations before I make this decision.
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Caleb Stone
You're already paying into the unemployment insurance system through your payroll taxes, so there's no additional payment when someone files a claim. However, terminating for performance issues (as opposed to gross misconduct) typically means they'll qualify for benefits, which could potentially affect your UI tax rate in future years depending on your company's claims history.
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Jade Santiago
•So the NYS Department of Labor will approve their claim and it comes out of what I've already paid in? I thought employers had to pay directly when someone gets fired.
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Daniel Price
Performance terminations usually result in approved UI claims unless you can prove willful misconduct. The key is documentation - if you have written warnings and improvement plans showing you gave them chances, that's good for your records but won't disqualify them from benefits. Your unemployment tax rate might go up slightly if you have multiple claims.
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Olivia Evans
•this is why my old boss never fired anyone lol, just made their life miserable until they quit
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Sophia Bennett
Wait I'm confused about this too... when I got laid off my employer told me they had to pay my unemployment directly? Was that wrong?? I've been getting my weekly claims from NYS Department of Labor for 3 months now and assumed my old company was cutting the checks.
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Caleb Stone
•Your employer was mistaken. The NYS Department of Labor pays unemployment benefits from the UI trust fund, which is funded by employer payroll taxes. Individual employers don't write checks directly to former employees unless it's some kind of private severance agreement.
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Aiden Chen
I had issues reaching NYS Department of Labor when I needed to contest a claim from a former employee who we terminated for theft. Kept getting busy signals for weeks. Finally used a service called Claimyr (claimyr.com) that got me through to an actual agent who explained the misconduct documentation requirements. They have a video demo at https://youtu.be/qyftW-mnTNI showing how it works. Made the whole process much easier than trying to call myself.
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Jade Santiago
•Thanks for the tip! I might need that if this employee tries to fight the termination or if I need to clarify anything with NYS Department of Labor about the claim.
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Zoey Bianchi
Just fire them already. The unemployment system is broken anyway and they'll probably get benefits no matter what you do. I've had employees steal from me and still get approved for UI because NYS Department of Labor doesn't care about small businesses.
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Olivia Evans
performance issues vs misconduct is a big difference though. if someone's just not good at their job that's not their fault really, they should get unemployment. if they're stealing or showing up drunk that's different
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Diego Flores
As someone who went through this recently, I can confirm what others are saying - you don't pay unemployment benefits directly to the employee. The NYS Department of Labor handles all payments from the trust fund that employers like you contribute to through payroll taxes. For performance issues (not misconduct), the employee will likely qualify for benefits, but this doesn't mean extra costs upfront for you. Your future UI tax rate could be affected if you have multiple claims, but that's calculated annually based on your overall claims history. Document everything well for your records, but performance terminations rarely disqualify someone from receiving benefits in NY.
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Jabari-Jo
•This is really helpful clarification! So just to make sure I understand - the NYS Department of Labor uses the trust fund that all employers pay into, and then my future tax rate might go up based on how many claims are filed against my company overall? Is there a threshold where it really starts to impact your rates significantly?
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