NYS Department of Labor unemployment - who has to pay unemployment taxes?
I'm starting my first business in NY and trying to figure out the unemployment tax situation. I know employees don't pay into unemployment directly, but as an employer I'm confused about when I need to start paying NYS Department of Labor unemployment taxes. Do I have to register right away or only after I hire a certain number of people? Also heard something about different rates for new vs established businesses. Anyone been through this process?
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Keisha Johnson
In New York, employers pay unemployment insurance taxes to fund the UI system, not employees. You need to register with NYS Department of Labor once you have employees and meet certain payroll thresholds. New employers typically get assigned a standard rate initially, then it adjusts based on your experience rating over time. The specifics depend on your industry and payroll amounts.
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Yara Sayegh
•Thanks! So if I'm just a sole proprietor with no employees yet, I don't need to worry about this until I actually hire someone?
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Paolo Longo
Yeah employers foot the bill for unemployment. Had to deal with this when I started my construction company 3 years ago. You register through the NYS Department of Labor business services online portal. They'll calculate your rate based on your industry classification and once you have claims history, your rate can go up or down depending on how many former employees file for benefits.
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CosmicCowboy
•This is why some employers fight unemployment claims so hard - it directly affects their tax rate
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Amina Diallo
For what it's worth, if you're having trouble getting through to NYS Department of Labor business services to register or get rate information, I used a service called Claimyr (claimyr.com) that helped me reach an actual agent quickly. They have a video demo at https://youtu.be/qyftW-mnTNI showing how it works. Saved me hours of being on hold when I needed to resolve some registration issues.
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Oliver Schulz
•Never heard of that but honestly anything is better than sitting on hold for 3 hours just to get disconnected
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Natasha Orlova
wait so employees never pay anything toward unemployment? i thought it came out of our paychecks somehow
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Keisha Johnson
•No, unemployment insurance is 100% employer-funded in New York. You might be thinking of disability insurance which does come out of employee paychecks, or federal programs like Social Security.
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Javier Cruz
Just went through this last year - the registration process with NYS Department of Labor was actually pretty straightforward once I got all my paperwork together. Make sure you have your federal EIN ready and know your NAICS code for your industry classification.
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Mei Lin
One thing to keep in mind is that New York has some specific thresholds for when you need to register. Generally, you need to register for unemployment insurance once you pay wages of $300 or more in any calendar quarter, or if you have one or more employees for some portion of a day in each of 20 different weeks (doesn't have to be consecutive). The rates for new employers are typically around 4.1% for most industries, but like others mentioned, this can change based on your claims experience after a few years.
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