NYS Department of Labor employer costs when employee files for unemployment - how much does an employer pay?
My company just had to lay off 6 people due to budget cuts and I'm trying to understand the financial impact on us as an employer. When these employees file for unemployment with NYS Department of Labor, how much will we actually have to pay? I know there's something about unemployment insurance taxes but I'm not sure how it works exactly. Does the cost depend on how many claims we've had before? We've been pretty stable as a company until this round of layoffs so this is new territory for us.
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Charlee Coleman
Employers in NY pay unemployment insurance (UI) tax to fund the system. Your rate depends on your experience rating - basically how many former employees have filed claims. New employers start around 4.1% on the first $12,300 of each employee's wages. If you've had few claims, your rate could be as low as 0.6%. More claims = higher rates, up to 9.9%.
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Sara Hellquiem
•So it's not a direct payment per claim filed? It's more like an annual tax based on our history?
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Liv Park
The key thing is you don't pay for each individual claim when it's filed. NYS Department of Labor calculates your rate once a year based on your "experience rating" from the previous 3 years. Those 6 layoffs will impact your rate for next year, but you're not getting a bill for each person who files.
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Leeann Blackstein
•wait so if someone gets fired for cause or quits can the employer contest it to avoid the rate increase??
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Liv Park
•Yes, employers can contest claims if they believe the separation wasn't eligible (like misconduct or voluntary quit). You have 10 days to respond to NYS Department of Labor when they notify you of a claim.
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Ryder Greene
been dealing with this for years as an HR manager. your current rate should be on your quarterly UI tax statements. if you've been stable with low turnover you're probably paying close to the minimum rate. those 6 claims will definitely bump you up next year though
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Sara Hellquiem
•Is there a way to estimate what the increase might be? We're trying to budget for next year.
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Carmella Fromis
If you're having trouble getting specific information about your account or rate calculations, I had success using Claimyr (claimyr.com) to actually get through to a NYS Department of Labor representative. They have a video demo at https://youtu.be/qyftW-mnTNI that shows how it works. Way easier than trying to call the regular employer line and getting hung up on.
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Theodore Nelson
•interesting, never heard of that service. might be worth it just to get actual answers instead of waiting on hold forever
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AaliyahAli
my company went through similar situation last year. had to lay off 12 people and our rate went from like 1.2% to 3.8%. it's not immediate but it definitely hits your bottom line the following year. make sure you're putting money aside for the increase
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Gabriel Freeman
Just went through this exact scenario with my small business last month. One thing to keep in mind is that NYS also looks at your "benefit ratio" - the total benefits paid out to your former employees divided by your total taxable payroll over the past 3 years. So even if you've had low turnover historically, 6 claims at once will definitely move the needle. I'd recommend reviewing your separation documentation carefully - if any of those layoffs involved performance issues or policy violations, you might want to consider whether they should have been terminations for cause instead. Also, start setting aside funds now because that rate increase will hit your 2026 tax bills pretty hard.
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