How does unemployment affect a business - NYS Department of Labor employer questions
I'm a small business owner trying to understand how unemployment claims from former employees affect my business operations and costs. I've had three employees file for unemployment benefits with NYS Department of Labor over the past six months after I had to do layoffs due to reduced demand. My accountant mentioned something about experience ratings and increased premiums but I'm confused about how this all works. Does anyone know how unemployment claims impact businesses in New York? I'm worried about my unemployment insurance costs going up and affecting my ability to hire back when things improve.
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Malik Johnson
Yes, unemployment claims directly affect your business through the experience rating system. NYS Department of Labor calculates your unemployment insurance tax rate based on your claims history over the past few years. More claims from your former employees means higher tax rates, which can significantly increase your payroll costs. The rate adjustments typically happen annually, so you might not see the impact immediately but it will hit your bottom line.
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CosmicCaptain
•That's exactly what I was afraid of. Do you know how long it takes for the rates to go back down if I don't have any more claims?
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Isabella Ferreira
Your unemployment insurance premiums are calculated based on your experience rating, which looks at the ratio of benefits paid to your former employees versus your total payroll. If you had legitimate layoffs due to business conditions, those claims will count against your rating. However, if you contest claims where employees quit or were terminated for misconduct and win those appeals, it won't hurt your rating as much. Make sure you respond to any NYS Department of Labor notices about claims and provide documentation if you disagree with the claim.
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Ravi Sharma
•This is really helpful info. I had no idea we could contest claims. One of my former employees quit without notice but still got approved for benefits.
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Freya Thomsen
been dealing with this for years and it's frustrating how the system punishes businesses for economic downturns beyond our control!! had to lay off 8 people in 2023 and my rates went through the roof even though i followed all the rules
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CosmicCaptain
•That's terrible! How much did your rates increase if you don't mind me asking?
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Malik Johnson
If you're having trouble reaching NYS Department of Labor about employer questions or need to discuss your account, you might want to check out claimyr.com. They help people get through to actual agents when the phone lines are backed up. There's a video demo at https://youtu.be/qyftW-mnTNI that shows how it works. I used it last month when I needed to clarify some reporting requirements and couldn't get through the regular employer hotline.
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Isabella Ferreira
•Interesting, I didn't know there were services like that for employers too. The NYS Department of Labor phone system is definitely a nightmare to navigate.
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Omar Zaki
Also keep detailed records of everything - termination dates, reasons for separation, any disciplinary actions. NYS Department of Labor will request this information when processing claims and having organized documentation can help if you need to contest anything. The experience rating system typically looks at a 3-year window, so it takes time for your rates to improve after a bad year.
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CosmicCaptain
•Good point about the documentation. I've been pretty casual about record keeping but sounds like I need to get more organized.
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