Unemployment Insurance (UI) refers to a joint federal and state program that provides temporary monetary benefits to eligible workers who are actively seeking new employment. The federal government oversees the general administration of state unemployment insurance programs, but the states control the specific features of their unemployment insurance programs, such as eligibility requirements and length of benefits. This blog provides an overview of UI employer liability in New York for businesses operating in the state.
UI Employer Liability in New York
Unemployment insurance in New York is administered by the New York Department of Labor. All employers have to register for unemployment insurance once they meet the conditions for liability under the New York State Unemployment Insurance Law.
The conditions for UI employer liability in New York differ for the following types of businesses:
General business employers are liable on:
- The first day of the calendar quarter they pay the remuneration of $300 or more; or
- The day they obtain any or all of the business of a liable employer.
Non-profit employers are liable:
- On the first day of the calendar quarter they pay the remuneration of $1,000 or more; or
- As of the first day of the calendar year they employ four or more workers on at least one day in each of 20 different weeks during that year or the prior calendar year.
Employers of household help are liable on the first day of any calendar quarter they pay the remuneration of $500 or more.
Effective January 1, 2020, employers of agricultural labor are liable as of:
- The first day of any calendar quarter after January 1, 2020, in which they pay the remuneration of $300 or more; or
- The day you obtain any or all of the business of a liable employer.
Government employers are liable on the first day of the calendar quarter they pay the remuneration to employees in covered employment, regardless of how much remuneration they pay or the number of employees.
All Indian tribes, as defined in Section 3306(u) of FUTA, are liable under the New York State Unemployment Insurance Law on the first day of the calendar quarter they pay the remuneration to employees in covered employment. It does not matter how much remuneration they pay or the number of employees.
Registering with the New York Department of Labor
New York employers subject to UI tax must establish a New York UI tax account with the New York DOL. Registering for a UI tax account is necessary as soon as their UI employer liability in New York is established. Also, before employers begin the registration process, they must obtain a Federal Employer Identification Number (FEIN) from the Internal Revenue Service (IRS).
General business and household employers can register online through New York Business Express (NYBE). On the other hand, online registration is not available for non-profit, agricultural, government, or Indian tribe employers. These employers must register by mail.
After the registration, if UI employer liability in New York is confirmed, employers must electronically submit a Quarterly Combined Withholding, Wage Reporting and Unemployment Insurance Return (Form NYS-45). Once they receive a Notice to Employees poster informing employees their jobs may be covered by unemployment insurance, employers have to display it at each of the business locations, where employees can easily see it.
UI Employee Eligibility in New York
As in every other state, employees in New York who are temporarily out of work through no fault of their own may qualify to collect unemployment benefits. However, the eligibility rules, prior earnings requirements, benefit amounts, and other details vary from state to state.
The New York State Unemployment Insurance Program provides weekly income for people who are out of work through no fault of their own, have enough employment to establish a claim, are ready, willing, and able to work, and are actively seeking work.
Claimants can meet the necessary requirements for UI employee eligibility in New York, if:
- They lost a job due to lack of work;
- The temporary or seasonal employment ended;
- Their job was eliminated;
- There was an involuntary reduction in force;
- The company downsized or shut down;
- The company restructured or reorganized;
- There was a lack of company operating funds or orders;
- They were out of work for any other business reason that they did not choose or control;
- Their employer discharged or fired them because they could not meet the performance or production standards or qualifications for the job.
Claimants may be denied UI employee eligibility in New York if they:
- Were fired because they violated a company policy, rule or procedure, such as absenteeism or insubordination;
- Quit the job without good cause, such as a compelling personal reason;
- Are out of work because of a work stoppage, except for lockouts, in the last 14 days that violated an existing collective bargaining agreement where they worked.
Employment Necessary for UI Employee Eligibility in New York
To meet requirements for UI employee eligibility in New York, claimants:
- Must have worked and been paid wages for work in at least two calendar quarters in their base period;
- Must have been paid at least $2,900 in wages in one of the calendar quarters in their base period for claims filed in 2022; and
- The total wages paid in claimants’ base period must be one and one-half times their high quarter wages.
No more than $11,088 of claimants’ high quarter earnings is used to determine their UI employee eligibility in New York. They must have earned at least half that amount, or $5,544, in the other base period quarters.
If claimants qualify using the Basic base period, NYDOL uses that period to establish the claim. If they do not qualify in the Basic base period, NYDOL will calculate using the Alternate base period.
However, if claimants qualify under the Basic base period, but think that using the Alternate base period would give them a higher benefit rate, they can request a recalculation of the rate using the Alternate base period. To make this request, claimants have 10 days from the date of the initial notice.
Once claimants use wages to establish a claim, they cannot use them again. If they were fired for misconduct or a criminal act, they may not use any wages paid for that work to establish a claim or to calculate the benefit rate. Also, if they are filing a repeat unemployment insurance claim, claimants must have earned new wages of at least ten times their benefit rate in the benefit year to qualify for a new claim.
Compliance with New York Unemployment Insurance
The UI tax funds unemployment compensation programs for eligible employees. In New York, the state UI tax is just one of several taxes that employers have to pay. Other important employer taxes include federal UI tax and state and federal withholding taxes. To ensure compliance and avoid possible penalties for making mistakes related to UI employer liability in New York, they have to regularly monitor both the IRS and DOL websites for the latest information.
Today’s companies have to comply with an overwhelming number of employment regulations at both the federal and state levels. However, to simplify this process, they can outsource unemployment claims management and reduce administrative burden and costs. Using systems designed specifically for unemployment claims administration allows them not only to comply with state and federal laws but also to focus on core business functions instead of monitoring the changes to the unemployment legal landscape.