How does unemployment impact businesses - NYS Department of Labor tax rates going up?
I run a small manufacturing business in upstate NY and just got notice that our NYS Department of Labor unemployment tax rate is increasing next year. We had to lay off 8 people during the slow season last winter and I'm wondering if that's why our rate went up. Does anyone know how the unemployment system actually impacts businesses? I thought we just paid into it but didn't realize there were consequences for having employees file claims. Our accountant mentioned something about experience ratings but I don't really understand how it works.
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Isaiah Thompson
Yes, your unemployment tax rate is directly tied to how many of your former employees file successful claims. It's called an experience rating system. The more claims filed against your account, the higher your rate goes. NYS Department of Labor calculates this based on your claims history over the past few years. Seasonal layoffs definitely count as chargeable claims unless you can prove misconduct or voluntary quit.
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Jessica Nguyen
•So basically I'm being penalized for seasonal business patterns that are completely normal in my industry? That seems unfair.
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Ruby Garcia
The experience rating system is designed to make employers think twice before laying people off unnecessarily. But seasonal businesses do get hit hard. You might want to look into whether your laid-off workers could have been classified differently - like if they were temporary seasonal workers from the start, that might affect how the claims are charged to your account.
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Jessica Nguyen
•Interesting point about seasonal classification. We've always hired them as regular employees but maybe we should restructure that.
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Alexander Evans
my boss always complains about this stuff too, says it costs the company way more than just the wages when they have to let people go
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Evelyn Martinez
Had a similar situation with my restaurant. When we had to reduce staff during renovations, our NYS Department of Labor rate jumped from 2.1% to 4.8%. It's brutal because you're already dealing with reduced revenue and then get hit with higher taxes. I ended up contesting some of the claims through the NYS Department of Labor appeals process because two of the employees had actually quit but filed anyway.
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Jessica Nguyen
•Wait, you can contest unemployment claims? I had no idea. How does that process work?
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Evelyn Martinez
•Yeah, if you have documentation that someone quit or was fired for misconduct, you can challenge their claim. But honestly, it's a pain and takes forever. I had to call the NYS Department of Labor multiple times to get through. Actually used a service called Claimyr (claimyr.com) to help me reach an agent faster - they have this video demo that shows how it works: https://youtu.be/qyftW-mnTNI. Made the whole process way less frustrating.
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Benjamin Carter
This whole system is just another way the government squeezes small businesses! We pay taxes, we pay into unemployment, we follow all the rules, and then they punish us for normal business decisions. Meanwhile big corporations get bailouts when they lay off thousands. It's completely backwards.
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Maya Lewis
•I mean I get your frustration but the unemployment system does help people who lose their jobs through no fault of their own. Maybe the rates could be more fair for seasonal businesses though.
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Isaac Wright
The good news is that your rate will eventually come back down if you don't have more claims. NYS Department of Labor uses a rolling average so once those layoffs age out of the calculation period, your experience rating should improve. Just try to avoid any more claims if possible.
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Jessica Nguyen
•That's somewhat reassuring. Do you know how long it takes for claims to stop affecting your rate?
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Isaac Wright
•I believe it's a 3-year lookback period but don't quote me on that. You'd have to check with NYS Department of Labor or your accountant for the exact timeframe.
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