Who pays for unemployment compensation in NY - confused about funding source
I just started collecting unemployment benefits and my friend told me that my former employer is the one paying for it directly. Is this true? I thought it came from some government fund. I'm worried my old boss is going to be upset about having to pay my weekly claim amount. Can someone explain how this actually works? I don't want there to be bad blood if I ever need a reference from them.
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Yara Khalil
Your employer doesn't pay your weekly benefits directly. NYS Department of Labor unemployment compensation is funded through unemployment insurance taxes that employers pay quarterly based on their payroll. Think of it like insurance - they pay premiums, and the state pays claims when needed. Your former employer already paid these taxes before you even filed your claim.
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LunarEclipse
•Oh that makes so much more sense! So they're not writing a check every week for my claim? That's a huge relief.
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Keisha Brown
The unemployment insurance system is funded entirely by employer taxes, not employee payroll deductions. Employers pay into the state unemployment insurance trust fund based on their experience rating - companies with more layoffs pay higher rates. Your benefits come from this collective fund, not directly from your specific employer's pocket.
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Paolo Esposito
•wait so if a company lays off a lot of people their taxes go up?? that seems backwards
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Keisha Brown
•It's designed to incentivize employers to maintain stable employment. Companies that frequently lay off workers pay higher unemployment insurance tax rates.
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Amina Toure
I had the same worry when I first filed! But my HR department actually explained that they budget for unemployment taxes as part of their regular business expenses. It's not a surprise cost when someone files a claim - they've already been paying into the system for years.
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LunarEclipse
•That's really good to know. I was imagining my boss getting some bill with my name on it every week!
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Oliver Weber
If you're having trouble reaching NYS Department of Labor to get more details about how the system works, I used claimyr.com recently and it was actually helpful. They have a video demo at https://youtu.be/qyftW-mnTNI that shows how it works. I was stuck trying to get through to an agent for days about my claim status and this service got me connected in under an hour.
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FireflyDreams
•interesting, never heard of that service before but calling NYS Department of Labor is definitely a nightmare
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Natasha Kuznetsova
The whole unemployment system is basically employer-funded social insurance. They pay taxes whether anyone files claims or not, just like how you pay car insurance premiums even if you never have an accident. The state pools all those tax payments and uses them to pay benefits when people become unemployed.
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