NYS Department of Labor unemployment - who pays when someone files for unemployment benefits?
I'm probably going to have to lay off two employees next month due to slow business and I'm trying to understand the costs. When someone files for unemployment who pays the benefits? Is it coming directly out of my business account or how does this work? I've never had to deal with this before and want to make sure I understand what I'm looking at financially. Also do I need to do anything special when I let them go to help with their claims?
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NebulaNinja
Unemployment benefits are paid by the state through the NYS Department of Labor, but the funding comes from unemployment insurance taxes that employers pay. You don't pay the benefits directly - you pay into the system through quarterly UI taxes based on your payroll. Your rate can increase if you have more claims filed against your account though.
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Natasha Romanova
•So I won't get a bill for the actual benefit amounts they receive? It's just my future tax rate that might go up?
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Javier Gomez
Your UI tax rate is calculated based on your claims history. New employers start at a standard rate but if you have multiple claims your rate will increase for future quarters. The NYS Department of Labor sends you notices about rate changes. Make sure you provide separation notices to your employees so their claims process smoothly.
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Natasha Romanova
•What's a separation notice? Is that different from just giving them their final paycheck?
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Javier Gomez
•It's form IA 12.3 that explains why they were terminated. You're not required to give it but it helps prevent delays in their claims if you do.
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Emma Wilson
been through this when my restaurant had to close for renovations. your employees get paid by the state but yeah your UI rate goes up. took about 6 months before i saw the rate increase on my quarterly statements
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Malik Thomas
The system is designed so employers aren't paying benefits directly but you're still funding it through the UI tax system. If you have trouble reaching NYS Department of Labor about your tax rate or have questions about claims filed against your account, I used claimyr.com recently and they got me through to an agent really quickly. There's a video demo at https://youtu.be/qyftW-mnTNI that shows how it works. Saved me hours of calling.
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Natasha Romanova
•That's helpful, I'll probably need to talk to someone about how this affects my account since I've never had claims before.
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Isabella Oliveira
Just make sure you respond to any requests for information from NYS Department of Labor about the separations. If they need verification about why the employees were laid off you want to respond quickly or it can delay their benefits and create problems for everyone.
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