Who pays unemployment when a business closes - NYS Department of Labor question
My employer just announced they're shutting down permanently next month and I'm trying to understand how unemployment benefits work in this situation. Do I still get benefits even though the company is going out of business? Who actually pays for my unemployment - the company or NYS Department of Labor? I'm worried because I heard that if a business closes they might not have money to pay into the system anymore. Has anyone been through a business closure and still received their full UI benefits?
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Carmen Vega
Don't worry - you'll still get your full unemployment benefits! NYS Department of Labor pays your weekly benefits from the unemployment insurance trust fund, not directly from your employer. Your employer has been paying unemployment insurance taxes on your wages throughout your employment, so those funds are already in the system. Business closure is actually one of the qualifying reasons for unemployment benefits.
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Yuki Kobayashi
•That's such a relief! I was panicking thinking I might not get anything. Do I need any special documentation from my employer about the closure?
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Andre Rousseau
Your benefits come from unemployment insurance taxes that employers pay into the state system - it's like insurance premiums. Even if your company goes bankrupt, those taxes were already paid and the money is sitting in NYS Department of Labor's trust fund. You just need to file your claim normally and report 'business closure' as your reason for separation.
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Zoe Stavros
•This happened to my whole department last year when our company folded. Everyone got approved for UI benefits without any issues. The only thing that took longer was getting our final paychecks from the company itself.
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Jamal Harris
I've been trying to reach NYS Department of Labor for weeks about my claim status but can never get through on the phone. If anyone needs to actually talk to someone there, I found this service called Claimyr (claimyr.com) that helped me get connected to an agent. They have a video demo at https://youtu.be/qyftW-mnTNI showing how it works. Way better than sitting on hold for hours just to get disconnected.
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GalaxyGlider
•How much does that cost though? I'm already stressed about money with the job loss.
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Jamal Harris
•They focus on the value of actually reaching someone rather than the cost. For me it was worth it since I was getting nowhere with regular calling.
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Mei Wong
same thing happened at my job but it was like 6 months ago, got all my benefits no problem, just make sure you keep filing your weekly claims even if your first payment takes a while to come through
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Liam Sullivan
The whole system is set up specifically for situations like this. Employers pay unemployment insurance precisely so workers have benefits when layoffs or closures happen. NYS Department of Labor has been handling business closure claims for decades - it's routine for them. Just be honest about the closure date and reason when you file.
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Yuki Kobayashi
•Good to know it's routine for them. I was worried this would be some complicated special case that would delay everything.
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Laila Fury
I went through a business closure situation about 18 months ago and wanted to share what I learned. The key thing is to file your claim as soon as possible after you get notice of the closure - don't wait until your last day of work. NYS Department of Labor can process your claim faster if you get it in early. Also, if your employer gives you any severance pay, that might delay when your benefits start, so factor that into your timing. The unemployment insurance system really does work as designed for business closures - it's probably one of the most straightforward scenarios they handle.
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NebulaNomad
•This is really helpful advice about filing early! I didn't realize timing could make such a difference. Quick question - when you say "as soon as possible after getting notice," do you mean I should file right when they announce the closure even if I'm still working there for another month? Or should I wait until closer to my actual last day?
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NeonNova
•@NebulaNomad You should file your claim about a week before your actual last day of work, not immediately when they announce the closure. NYS Department of Labor needs you to be actually unemployed or have a definite separation date to process the claim. If you file too early while still employed, it can create complications. I filed mine the Thursday before my final Monday, and it worked out perfectly - gave them time to review everything and my first payment came through right on schedule.
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Anderson Prospero
Just want to add some reassurance from another perspective - I work in HR and have helped employees through several business closures over the years. The unemployment system is actually very well designed for exactly this scenario. Your employer has been paying quarterly unemployment insurance taxes based on your wages for as long as you've worked there, so those funds are already secured in the state trust fund regardless of what happens to the company financially. The NYS Department of Labor processes business closure claims routinely - they see it as one of the clearest cases for benefit eligibility since it's obviously not the employee's fault. Make sure to keep any documentation about the closure (emails, notices, etc.) just in case, but in my experience these claims get approved smoothly. The main thing is don't delay filing once your separation date is set.
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Clay blendedgen
•Thanks for sharing the HR perspective! That's really reassuring to hear from someone who's guided people through this process multiple times. I'm definitely feeling less anxious about the whole situation now. One follow-up question - when you mention keeping documentation about the closure, what specific types of documents should I be looking for? I got an email from management announcing the closure, and I assume I'll get something more formal closer to the date. Is there anything else I should make sure to request or save?
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