Who pay for unemployment benefits - NYS Department of Labor funding question
I'm curious about who actually pays for unemployment benefits in New York. Is it the government, employers, or what? My brother got laid off from his construction job and is getting UI payments but we're not sure where the money comes from. Does it come out of taxes or does his old employer have to pay? Just trying to understand how the whole system works.
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Ethan Brown
Unemployment benefits in NY are funded through employer payroll taxes, not employee taxes. Your brother's former employer and all other employers in the state pay into the unemployment insurance trust fund administered by NYS Department of Labor. The rate employers pay depends on their experience rating - companies with more layoffs pay higher rates.
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CosmicCrusader
•Oh interesting! So it's not coming from our income taxes then? That's good to know.
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Yuki Yamamoto
ya its all employer funded thru SUTA taxes (state unemployment tax act). they pay quarterly based on their payroll and claim history. workers dont pay anything directly for UI coverage
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Carmen Ortiz
To be more specific, employers pay both federal (FUTA) and state (SUTA) unemployment taxes. The federal portion funds administrative costs and provides loans to states when needed. The state portion funds the actual benefit payments. NYS Department of Labor sets the tax rates annually based on the trust fund balance and economic conditions. Your brother's benefits are coming from this employer-funded pool.
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Andre Rousseau
•Wait so if my company has had a lot of layoffs do they pay more? That seems unfair to penalize companies for economic downturns they can't control.
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Carmen Ortiz
•The experience rating system is designed to incentivize stable employment. Companies with consistent layoffs do pay higher rates, but there are also factors beyond their control that NYS Department of Labor considers. It's not perfect but it helps fund the system fairly.
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Zoe Papadakis
This is why when you're laid off it doesn't hurt to file for benefits even if you think you might not qualify. You and your employer already paid into the system through those employer taxes. It's insurance you've earned through your work history.
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Jamal Carter
I had trouble reaching NYS Department of Labor to ask similar questions about my claim funding. Kept getting busy signals for weeks. Finally used claimyr.com and their callback service got me through to an actual agent in like 20 minutes. They have a video demo at https://youtu.be/qyftW-mnTNI that shows how it works. Really helpful for getting answers about how the system operates.
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CosmicCrusader
•Thanks for the tip! Might try that if I have more questions about my brother's situation.
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AstroAdventurer
Yeah the whole system is basically unemployment insurance paid by employers. Think of it like workers comp but for job loss instead of injuries. NYS Department of Labor administers it but employers fund it through their tax contributions.
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