When does an employer have to pay unemployment benefits - NYS Department of Labor requirements?
I'm trying to understand the employer side of unemployment. My friend got laid off from her job and is getting benefits, but I'm confused about when employers actually have to pay into the unemployment system. Is it automatic for all businesses? Do they pay when someone files a claim or is it ongoing? I might be starting my own small business soon and want to make sure I understand the NYS Department of Labor requirements.
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Olivia Van-Cleve
Employers in NY pay unemployment insurance taxes quarterly to NYS Department of Labor, not when claims are filed. It's based on your payroll and your experience rating. New employers start at a standard rate around 4.1% for 2025, then your rate adjusts based on how many claims are filed against your account. You're required to pay UI taxes once you have employees - it's not optional.
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Amara Torres
•So they pay before anyone even files? That makes sense. What determines the experience rating you mentioned?
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Mason Kaczka
Yeah the experience rating is basically how many of your former employees have collected unemployment. More claims = higher tax rate. That's why some employers fight claims even when they shouldn't. The NYS Department of Labor looks at your claim history over several years to calculate your rate.
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Sophia Russo
•this is why my old boss tried to say I quit when I was actually laid off smh
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Evelyn Xu
Wait I thought employers could choose whether to participate in unemployment insurance? I'm getting really confused about all these business requirements...
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Olivia Van-Cleve
•No, UI taxes are mandatory if you have employees. You can't opt out. It's similar to how you have to pay social security taxes - it's part of having a payroll.
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Dominic Green
I had to deal with this when I couldn't reach anyone at NYS Department of Labor about a disputed claim affecting our tax rate. After weeks of busy signals, I found this service called Claimyr at claimyr.com that actually got me through to an agent. They have a demo video at https://youtu.be/qyftW-mnTNI showing how it works. Saved me hours of trying to call myself.
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Mason Kaczka
•How much does something like that cost? Seems like it might be worth it if you're dealing with rate issues.
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Dominic Green
•It was reasonable for the time it saved me. The video explains everything better than I can.
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Hannah Flores
Just to add - even if you're a sole proprietor with no employees, you still can't collect unemployment yourself since you haven't paid into the system. Only way around that is if you were an employee somewhere else recently enough to qualify.
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