How do employers pay unemployment insurance in NY - confused about the process
I'm starting a small business in NY and trying to understand how employers pay unemployment insurance. I know employees get benefits from NYS Department of Labor when they're laid off, but I'm confused about how we actually pay into the system as employers. Do we pay quarterly? Is it based on payroll? And what happens if we have a claim filed against us - does our rate go up? I've been reading the NYS Department of Labor employer handbook but it's pretty confusing. Any business owners here who can explain this in simple terms?
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Aisha Hussain
As an employer in NY, you'll pay unemployment insurance taxes quarterly to NYS Department of Labor. The rate depends on your industry and claims history. New employers start with a standard rate, usually around 4.1% for the first few years. You pay this on the first $12,300 of each employee's wages annually. If employees file successful unemployment claims against your business, your rate can increase in future years.
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Mateo Rodriguez
•Thanks! So the $12,300 is the wage base for 2025? And do I pay this even if I only have part-time employees?
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GalacticGladiator
Yes you pay on part-time employees too, as long as they meet the minimum requirements. The wage base changes each year - check the NYS Department of Labor employer portal for current amounts. You'll register through their online system and they'll send you quarterly statements. Make sure you keep good records of any layoffs or terminations because that affects your experience rating.
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Ethan Brown
•What exactly is the experience rating? My uncle owns a restaurant and says his unemployment tax rate keeps going up because of high turnover.
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Aisha Hussain
•Experience rating is how NYS Department of Labor calculates your tax rate based on unemployment claims filed by your former employees. Higher turnover and more successful claims = higher rates. Restaurants typically have higher rates because of seasonal layoffs and industry turnover patterns.
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Yuki Yamamoto
ugh the whole system is so complicated!! I've been trying to figure out my quarterly payments for months and keep getting different answers from NYS Department of Labor. First they said one rate then when I called back they said something totally different. Has anyone had luck actually getting through to someone who knows what they're talking about?
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Carmen Ruiz
•I had the same problem last year! Kept getting transferred around and nobody could give me a straight answer about my rate calculation. Finally used this service called Claimyr (claimyr.com) that helps you get through to actual NYS Department of Labor agents who can look up your account. They have a video demo at https://youtu.be/qyftW-mnTNI showing how it works. Saved me hours of being on hold and actually got my rate issue resolved in one call.
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Andre Lefebvre
make sure you understand the difference between unemployment insurance and workers comp too - totally separate systems. UI goes to NYS Department of Labor, workers comp is different. I mixed them up my first year and got behind on payments.
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Mateo Rodriguez
•Good point! I was wondering about that. So unemployment tax is just for when people get laid off or fired, not injured on the job?
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Andre Lefebvre
•exactly. unemployment is for job loss, workers comp is for injuries. completely different agencies and payment systems.
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Natasha Ivanova
As someone who just went through setting up unemployment insurance for my small consulting firm, I can add a few practical tips. The NYS Department of Labor online portal is actually pretty helpful once you get registered - you can see your quarterly statements, payment history, and current rate there. One thing that caught me off guard was that you need to report new hires within a certain timeframe, and if you miss deadlines on payments there are penalties. Also, if you're seasonal or have irregular staffing, consider how that might affect your experience rating down the line. The initial paperwork is a bit overwhelming but it gets more routine once you're in the system.
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CosmicCruiser
•Thanks for sharing your experience @Natasha Ivanova! The new hire reporting requirement is something I hadn't thought about. How quickly do you need to report new hires to NYS Department of Labor? And are there specific forms or is it all done through the online portal? I want to make sure I don't mess up the compliance side when I start hiring employees.
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