How is unemployment paid for in NY - confused about NYS Department of Labor funding
I just started receiving unemployment benefits and my coworker mentioned something about employers paying for it through taxes. Is this true? I'm getting $425 a week and wondering where this money actually comes from. Does it come from my previous employer directly or is it some kind of government fund? Also heard something about a state trust fund but don't really understand how the whole system works. Anyone know the details about how NYS Department of Labor unemployment benefits are actually funded?
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Jade Santiago
Unemployment insurance in New York is funded through payroll taxes paid by employers, not employees. Your employer pays into the NYS Department of Labor unemployment insurance trust fund based on their payroll and experience rating. The money you're receiving comes from this pooled fund, not directly from your specific employer. The state also collects federal unemployment taxes (FUTA) which help fund the administrative costs and extended benefits during high unemployment periods.
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Lauren Johnson
•So my employer was paying this whole time while I was working? I never saw any deductions for unemployment on my paystubs.
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Caleb Stone
Yeah your employer pays quarterly taxes to NYS Department of Labor based on their total wages paid and their experience rating. Companies that lay off more workers pay higher rates. It's similar to how workers comp insurance works - higher risk employers pay more into the system.
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Daniel Price
•That explains why some companies are so reluctant to let people go even when business is slow. Makes sense from a cost perspective.
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Olivia Evans
wait so if my employer pays for this why did they fight my unemployment claim so hard?? they kept saying i quit when i was clearly laid off due to downsizing. spent weeks in adjudication because of their lies
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Jade Santiago
•Because their unemployment tax rate goes up if they have more claims. Each claim affects their experience rating which determines how much they pay into the system going forward. That's why some employers contest legitimate claims.
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Olivia Evans
•thats so messed up! i couldn't reach anyone at NYS Department of Labor for weeks to explain my side. finally used claimyr.com to get through to an actual person and got it sorted out. there's a video demo at https://youtu.be/qyftW-mnTNI showing how it works. saved me so much stress trying to get through their phone system
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Sophia Bennett
I'm worried about this affecting my employer negatively since they were really good to me during the layoff. They gave us two weeks notice and everything. Will my unemployment claim hurt them financially?
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Caleb Stone
•Don't worry about it - that's exactly what the system is designed for. Legitimate layoffs due to business conditions are normal part of the unemployment insurance system. Your employer was paying into this fund specifically for situations like yours.
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Aiden Chen
My dad always said unemployment was taxpayer money but sounds like it's actually employer funded. Learn something new every day I guess lol
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Zoey Bianchi
The funding structure is actually pretty complex. Most comes from state unemployment taxes (SUTA) paid by employers, but there's also federal funding through FUTA taxes. During recessions or extended benefit periods, additional federal money can flow in. NYS Department of Labor manages the state trust fund but federal Department of Labor oversees the overall system requirements and provides backup funding when state funds run low.
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Lauren Johnson
•Thanks for the detailed explanation! So it's mainly employer-funded but with federal backup. That makes me feel better about collecting benefits.
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Asher Levin
Just to add some numbers to this - in NY, employers typically pay between 0.6% to 9.9% of their first $12,300 in wages per employee annually, depending on their experience rating. New employers start at around 4.1%. So for a company with 50 employees making $50k each, they might pay around $25,000-$30,000 per year into the unemployment fund. It really is a significant business expense that employers have to budget for, which explains why they're so careful about how they handle layoffs and terminations.
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Kaitlyn Otto
•Wow those numbers really put it in perspective! No wonder employers take unemployment claims seriously. $25-30k annually for a medium sized company adds up fast. Thanks for breaking down the actual percentages and wage base - helps me understand why the whole experience rating system exists.
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