How much does unemployment cost an employer in NY - getting conflicting info from HR
Our small business just had to lay off 3 employees due to budget cuts and now I'm trying to figure out what this is going to cost us in unemployment taxes. HR at our parent company is giving me conflicting information about NYS Department of Labor rates. Some say it's a flat percentage, others mention experience ratings that change based on claims filed against us. Does anyone know the actual cost structure? We've never had to deal with unemployment claims before and I want to budget properly for next year.
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Lucas Turner
NY unemployment tax rates vary based on your company's experience rating. New employers start at 4.1% on the first $12,300 of each employee's wages. Your rate can go as low as 0.6% if you have few claims or as high as 9.9% if you have lots of unemployment claims filed against you. The NYS Department of Labor sends you a rate notice each year.
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Eleanor Foster
•Thanks! So the $12,300 is per employee per year? And the rate changes annually based on how many people file claims?
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Kai Rivera
Yeah the experience rating thing is real. We had a bunch of layoffs in 2023 and our rate jumped from 2.1% to 5.8% the following year. Each person who successfully files for unemployment against your company increases your costs. The NYS Department of Labor tracks it all and adjusts your rate.
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Anna Stewart
•That's brutal! Did you try to challenge any of the claims or just accept the higher rate?
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Kai Rivera
•We challenged one where the employee quit but claimed they were laid off, but honestly most legitimate layoffs you can't really fight. The process was a hassle too.
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Layla Sanders
wait so if I lay someone off they automatically get unemployment? I thought they had to apply and get approved first
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Lucas Turner
•They do have to apply through the NYS Department of Labor system, but layoffs for lack of work usually get approved unless there's misconduct involved. The employee still has to file weekly claims and do job searches.
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Morgan Washington
The real cost isn't just the tax rate - it's the administrative headache. Every time someone files a claim against your company, NYS Department of Labor sends you paperwork to verify employment dates, wages, reason for separation, etc. If you don't respond within 10 days they just approve the claim automatically. Had one case where we were trying to reach HR during COVID and missed the deadline - cost us big time.
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Eleanor Foster
•Oh no, I didn't realize there was a deadline! What kind of paperwork do they send exactly?
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Morgan Washington
•It's called a Request for Separation Information. You have to provide last day worked, wages, whether it was layoff/quit/fired, etc. Pretty straightforward but you HAVE to respond on time.
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Kaylee Cook
Been dealing with this stuff for years and honestly the hardest part is getting through to NYS Department of Labor when you have questions about claims or need to dispute something. Their phone lines are always jammed. I finally started using this service called Claimyr (claimyr.com) that gets you connected to actual agents without the endless hold times. They have a demo video at https://youtu.be/qyftW-mnTNI that shows how it works. Saved me hours of frustration.
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Eleanor Foster
•Never heard of that before - does it actually work? I hate the idea of being on hold for hours just to ask a simple question.
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Kaylee Cook
•Yeah it's legit, gets you through to the right department pretty quickly. Way better than the regular callback system they have.
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Oliver Alexander
just a heads up - if any of those 3 employees file for unemployment your rate WILL go up next year. theres no way around it with layoffs. budget for at least a 1-2% increase in your SUI rate
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Eleanor Foster
•Ugh, that's what I was afraid of. Thanks for the reality check though, better to plan for it now.
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