Who pays for unemployment benefits in NYS - employer vs state costs breakdown?

In New York, unemployment insurance is funded primarily through employer payroll taxes, not employee contributions. Employers pay into the state unemployment insurance fund based on their payroll and experience rating. The NYS Department of Labor collects these taxes quarterly from employers. So yes, the cost of unemployment is borne by employers through their UI tax contributions, but it's not a direct cost when you file - they've already been paying into the system.

Your former employer's UI tax rate can go up if they have a lot of claims filed against them over time. It's called an experience rating system. But don't let that stop you from filing - you earned those benefits and your employer knew this was part of the cost of doing business when they hired you.

I had trouble getting through to NYS Department of Labor when I needed to ask about this same question last year. If you need to speak with someone directly about how the funding works, I found this service called Claimyr (claimyr.com) that helps you actually reach an agent. They have a video demo at https://youtu.be/qyftW-mnTNI showing how it works. Saved me hours of busy signals trying to get through myself.

just file already!! your company laid you off they knew what they were doing. unemployment system exists for a reason and employers pay for it whether people use it or not

To add some specifics to what others have said - in NY, employers pay UI taxes on wages up to $12,300 per employee (as of 2024). The tax rate varies from 0.6% to 9.9% depending on the employer's claims history. New employers start at around 4.1%. The state also collects a small additional assessment. So yes, your former employer has been paying into this system all along - it's designed exactly for situations like layoffs. Don't feel guilty about using benefits you and your employer have already paid for through the system.

@Natasha Volkova - I was in a similar situation last year and had the same concerns about "hurting" my former employer. What helped me understand it better is thinking of unemployment insurance like any other insurance - you don't feel guilty about using health insurance when you get sick, right? Your employer has been paying these premiums (UI taxes) specifically so that this safety net exists for situations like layoffs. The system is designed to support workers during transitions, and employers factor these costs into their business planning. You earned this benefit through your work, so please don't let worry about your former employer's finances prevent you from getting the support you need while job searching.

I work in HR and can confirm what others have said - unemployment insurance is 100% employer-funded in NY. We pay quarterly taxes to the state based on our payroll, and these rates are adjusted annually based on our "experience rating" (how many former employees have filed claims). The important thing to understand is that we budget for these costs regardless of whether anyone actually files claims or not. The money is already set aside in the state fund. When you file, you're not taking money directly from your former employer's pocket - you're accessing benefits from a fund they've already contributed to. Please don't let concern for your employer prevent you from claiming benefits you're entitled to. That's exactly what the system is designed for!

As someone who recently went through this exact situation, I can add that the NYS DOL website has a really helpful FAQ section that breaks down the funding structure in plain language. What really helped me understand it was learning that unemployment insurance operates on a "mutualization" principle - all employers in the state contribute to a shared pool that protects all workers, regardless of which specific company laid them off. Your former employer has been paying into this system for years, not just for you but for all their employees past and present. The benefits you receive come from this collective fund, not from your specific employer's account. I filed my claim about 6 months ago and it was actually a much smoother process than I expected once I got over the same guilt you're feeling. Don't let that stop you - this is literally what the system exists for!

I went through this same worry when I was laid off from my job in Rochester last year. What really helped me was understanding that unemployment insurance is essentially a mandatory insurance program that ALL employers must participate in - it's not optional for them. They've been paying these premiums (UI taxes) every quarter since they started their business, whether anyone files claims or not. Think of it this way - if your house burned down, you wouldn't hesitate to file an insurance claim because you've been paying premiums, right? Same principle here. Your employer has been paying UI "premiums" specifically so this safety net exists for workers during layoffs, job loss, etc. The guilt you're feeling is totally understandable but misplaced - using unemployment benefits is exactly what your employer's tax payments were intended to cover. File your claim and focus on your job search. This is what the system is for!

I'm a claims examiner with the NYS Department of Labor and wanted to clear up any remaining confusion. The unemployment insurance system in NY is indeed 100% employer-funded through payroll taxes. When you file a claim, the benefits come from the State Insurance Fund that all employers have been contributing to - your specific employer doesn't write a check when you get benefits. However, their future tax rate CAN be affected by their "experience rating" which considers claims filed by their former employees over a multi-year period. But here's the key thing - even if your claim affects their rate slightly, this is literally how the system is designed to work. Employers know this when they hire employees. You have every legal and moral right to file for benefits you've earned. Don't let concern about your former employer prevent you from accessing support you're entitled to during your job search. That's exactly what this safety net exists for!

I just wanted to say thank you to everyone who contributed to this thread - as someone who was recently laid off and dealing with the same concerns as Natasha, this has been incredibly educational! The various perspectives from HR professionals, claims examiners, and people who've been through this process really paint a complete picture of how unemployment insurance actually works. I had no idea about the experience rating system or the State Insurance Fund structure. What really resonates with me is the insurance analogy - we don't feel guilty about using car insurance after an accident, so why should we feel guilty about using unemployment insurance after a layoff? Both are situations we pay into specifically to have protection when we need it. For anyone else reading this who might be on the fence about filing - it sounds like the system truly is designed for exactly these situations and employers are already budgeting for these costs as part of their normal business operations.

I'm new to the community and just stumbled across this thread while researching unemployment benefits myself. This discussion has been incredibly helpful! I was laid off last month and have been hesitating to file because I genuinely liked my former manager and didn't want to cause financial problems for the company. Reading all these explanations about how the system actually works - especially the insurance analogies and learning about the State Insurance Fund - has really opened my eyes. It's clear that unemployment insurance is set up as a legitimate business expense that employers plan for, not an unexpected burden. The perspective from the HR professional and claims examiner particularly helped me understand that this is just how the system is supposed to function. I'm definitely going to file my claim this week. Thank you to everyone who contributed - this thread should be required reading for anyone dealing with unemployment anxiety!

I'm reading through this thread as someone who's currently unemployed and was also hesitating to file for the same reasons everyone has mentioned. The explanations here have been incredibly helpful - especially learning that there's actually a State Insurance Fund rather than money coming directly from individual employers. What really sealed it for me was the claims examiner confirming that this is literally how the system is designed to work and that employers know this when they hire people. I think we put so much guilt on ourselves because we don't understand the mechanics behind these programs. It's like feeling bad about using public roads because they're taxpayer-funded - when actually that's exactly what they're there for! Thanks to everyone who took the time to explain this so thoroughly. This thread has genuinely changed my perspective and I'll be filing my claim tomorrow.