Does an employer pay for unemployment benefits in New York state?
I'm starting a new job next month and my manager mentioned something about unemployment taxes during orientation. I'm confused - do employers actually pay for unemployment benefits when someone gets laid off? I always thought it came from the government. Can someone explain how this works in New York? I want to understand what my employer is contributing on my behalf.
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Sophia Russo
Yes, employers in New York pay unemployment insurance taxes to fund the system. It's called State Unemployment Insurance (SUI) tax and it goes directly to NYS Department of Labor. The rate varies based on the employer's history - companies with more layoffs pay higher rates. Employees don't pay into this system at all.
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Mason Kaczka
•So if I file for unemployment later, it's technically money my employer already paid in? That makes me feel less guilty about using it if needed.
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Evelyn Xu
yeah your boss pays quarterly taxes for this stuff, its not cheap either especially for small businesses
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Dominic Green
To be more specific, employers pay both state unemployment tax to NYS Department of Labor and federal unemployment tax (FUTA). The state rate in New York ranges from 0.6% to 9.9% of wages depending on their experience rating. New employers start at around 4.1%. It's calculated on the first $12,000 of each employee's wages annually.
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Hannah Flores
•Wait so if someone makes $50k a year, the employer only pays unemployment tax on the first $12k? That seems low for how much people can collect.
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Dominic Green
•Correct, there's a wage base limit. But remember, thousands of employers are all paying into the same pool that funds everyone's benefits. It's a collective insurance system.
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Kayla Jacobson
This is why some employers fight unemployment claims so hard! Every time someone collects benefits, it can increase the company's tax rate for future years. I learned this when my old boss tried to contest my claim even though I was clearly laid off due to budget cuts.
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Mason Kaczka
•That's terrible! Did you have to appeal or did NYS Department of Labor side with you automatically?
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Kayla Jacobson
•NYS Department of Labor approved my claim after the standard adjudication process. The employer's contest was basically frivolous but it delayed my payments by 3 weeks. If you're having trouble reaching someone about a contested claim, I used a service called Claimyr that helped me get through to an actual agent at claimyr.com. They have a video demo at https://youtu.be/qyftW-mnTNI showing how it works.
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William Rivera
THE WHOLE SYSTEM IS RIGGED!!! Employers get tax breaks for keeping unemployment rates low while workers get pennies compared to what we actually earned. My last job I made $65k and unemployment was barely $500 a week before taxes!
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Evelyn Xu
•I mean the max benefit in NY is around $504 so that sounds about right for your salary. Its not supposed to replace your full income
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Grace Lee
Thanks for asking this question! I always wondered the same thing. Makes sense that it's employer-funded since they're the ones doing the hiring and firing decisions.
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Isabella Santos
This is really helpful to understand! I had no idea employers were paying quarterly taxes for this. It makes me wonder - does this mean that companies with better employee retention actually save money on these taxes? Like if a tech company rarely has layoffs, do they pay less than a seasonal business that has to let people go every winter?
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Ava Williams
•Exactly! That's how the experience rating system works. Companies with fewer unemployment claims get lower tax rates over time, while businesses with high turnover or frequent layoffs pay higher rates. So a stable tech company might pay closer to the minimum 0.6% rate, while a seasonal construction company could be paying much higher rates. It creates an incentive for employers to maintain steady employment when possible.
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