How is unemployment paid by employer in NYS - confused about the funding process
I'm trying to understand how unemployment benefits actually work from the employer side. My company just laid off 15 people including me, and I'm wondering how unemployment is paid by employer contributions. Do they pay into some kind of fund? Is there a direct cost to my former employer when I collect benefits? I filed my claim with NYS Department of Labor last week and want to understand if my old boss is getting hit with bills because of my unemployment claim. Anyone know how this system actually works?
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Landon Flounder
Employers in NY pay into the unemployment insurance fund through quarterly payroll taxes. It's called SUTA (State Unemployment Tax Act) contributions. Your employer has been paying this tax on your wages the entire time you worked there - it's not a new cost when you file for benefits. The NYS Department of Labor manages this fund and pays out benefits from the pooled money.
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Jacinda Yu
•So my employer already paid for my potential unemployment benefits while I was working? That makes more sense than them getting a bill now.
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Callum Savage
Yes, but there's more to it. Employers pay different rates based on their history of layoffs. Companies that lay off workers frequently pay higher unemployment tax rates, while companies with stable employment pay lower rates. So technically your claim will affect their future tax rate, but they're not paying your specific benefits directly.
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Ally Tailer
•This is why some employers fight unemployment claims - it can raise their tax rate for future years if they have too many claims.
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Aliyah Debovski
I had trouble reaching NYS Department of Labor to get clarification on this exact question last month. The phone lines are always busy and their website doesn't explain the employer side very clearly. I ended up using claimyr.com to get through to an actual agent who explained the whole funding system. They have a video demo at https://youtu.be/qyftW-mnTNI that shows how their service works. Finally got my questions answered after weeks of trying the regular phone number.
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Miranda Singer
•Never heard of that service but might be worth it if they can actually get you through to someone at NYS Department of Labor who knows what they're talking about.
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Cass Green
wait so my employer isnt mad at me for filing?? i thought they had to pay my benefits directly lol
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Landon Flounder
•No, they already paid into the system through their regular payroll taxes. Filing for unemployment when you're eligible is your right - you and your employer both contributed to this system.
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Finley Garrett
The whole system is designed so that employers pre-pay into the fund based on their payroll size. In New York, employers pay both state and federal unemployment taxes. The money sits in the unemployment insurance fund until workers need it. Your claim is paid from that pool, not directly from your former employer's pocket.
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Zoe Alexopoulos
This is really helpful info! I was worried my former employer would be upset about my unemployment claim, but knowing they've already been paying into the system through payroll taxes makes me feel better about filing. Just to clarify - when people mention the tax rate going up based on layoff history, is that something that happens immediately or does it take time to affect their rate? I'm curious how quickly those adjustments happen in the NYS system.
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