How does unemployment work who pays for it - confused about NYS Department of Labor funding
I just started my first real job and my boss mentioned something about unemployment taxes coming out of payroll. I'm totally confused about how this whole system works. Like who actually pays for unemployment benefits when someone gets laid off? Is it the company, the government, or do I pay into it from my paycheck? And if I ever need to file with NYS Department of Labor, where does that money actually come from? Sorry if this is a dumb question but I want to understand how it all works.
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Paolo Longo
Great question! Unemployment insurance is funded through employer taxes, not employee deductions. Your employer pays quarterly taxes to NYS Department of Labor based on their payroll and experience rating. The more claims filed against a company, the higher their tax rate goes. You as an employee don't pay into UI directly - it's entirely employer-funded in New York. When you file a claim, NYS Department of Labor draws from this insurance fund that all employers contribute to.
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Keisha Johnson
•Oh wow so I'm not paying anything into it? That's actually pretty cool that it's all covered by employers. Does that mean bigger companies pay way more than small businesses?
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CosmicCowboy
Your employer pays SUTA (State Unemployment Tax Act) taxes to fund unemployment benefits. In NY the rate varies but it's based on how many former employees have filed claims. Companies with lots of layoffs pay higher rates. There's also FUTA (Federal Unemployment Tax Act) but that's mostly for administrative costs. When you file with NYS Department of Labor, you're drawing from this pooled fund that all employers pay into.
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Amina Diallo
•I had no idea about the experience rating thing! So if a company keeps laying people off they get penalized with higher taxes? That seems fair.
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Oliver Schulz
ugh i remember when I got laid off last year and had to deal with all this. your company basically pays insurance premiums to NYS Department of Labor and when you file a claim they have to pay even MORE because their rates go up. its like car insurance but for jobs lol. the whole system is designed so companies think twice before just firing everyone
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Keisha Johnson
•That makes sense! So there's actually an incentive for companies to keep people employed. Thanks for explaining it that way!
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Natasha Orlova
I've been dealing with NYS Department of Labor for months trying to get through to someone about my claim status and it's been impossible. The phone system is a nightmare. I finally found this service called Claimyr (claimyr.com) that actually gets you connected to real agents. They have a demo video at https://youtu.be/qyftW-mnTNI that shows how it works. Saved me hours of calling and getting hung up on.
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Javier Cruz
•How much does that cost though? I'm already broke from being unemployed
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Natasha Orlova
•It's worth checking out their site for details, but honestly after weeks of getting nowhere with the regular phone system it was a lifesaver. Sometimes you just need to talk to an actual person at NYS Department of Labor.
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Emma Wilson
Just to add - the amount you can get in benefits is based on your earnings history, not how much your employer paid in taxes. NYS Department of Labor looks at your wages from the past year to calculate your weekly benefit amount. Max is around $504 per week right now I think.
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