Unemployment Costs Increase for NY Employers
Deborah Najarro  |  Lakeshore News Writer

August 3, 2011 - As the country continues to face a high unemployment rate of 9.2 percent, New York State is not far behind at 8 percent as of June 2011. Unfortunately, Oswego County ranked among the highest in June at 9.9 percent while the Rochester metro area fell slightly to 7.4 percent.

However, high unemployment still means more people filing claims with the Department of Labor for unemployment compensation to help them survive until they get a job. Commonly known as the unemployment check, this money comes from employers who must pay into the Unemployment Insurance (UI) fund every year, for every employee.
During the 2009 recession, New York State’s unemployment rate increased to 8.7 percent in June, its highest level since October 1992. In June 2009, the number of unemployed state residents jumped to 854,200, the greatest number on record since current data which extends back to 1976. The UI fund was depleted and the state had to borrow money from the federal government to support unemployed workers.

Over $3 billion in borrowed UI money was loaned with the understanding that it would be interest free as part of the Federal stimulus bill. However, Congress has not passed the necessary legislation to make this so and NYS employers who pay into the fund recently received notice that the interest on the loan, a whooping $95 million, is now due and they have to pay for it. Employers where sent a notice in July explaining the what NYS Dept of Labor called a temporary charge, and a bill soon followed with a tax assessment on each worker not to exceed $21.25 per employee.

A small company, with approximately 10-15 employees, is bound to pay nearly $300, and the payment is due August 15, while larger corporations with over 100 employees are going to see a bill closer to $2000.

NYS Assembly Minority Leader Brian Kolb has issued a letter to the Governor asking for this Unemployment Interest Assessment Surcharge to be recalled immediately and refunded to any employer who has already paid the bill. Kolb’s letter suggests, “If Congress fails to act, I suggest using a portion of the nearly $800 million in surplus first quarter tax receipts from the current fiscal year to cover the $95 million interest payment...instead of nickel and diming NY businesses with another costly assessment.”

Congresswoman Ann Marie Beurkle’s staff were unable to comment on the matter specifically but stated the understanding is that Congress would have until Sept. 30th to do something with this interest free extension. They were unable to say whether anyone was even discussing it because the debt and deficit are center stage right now.

Jocelyn Vangelder, Manager at the Wayne County Dept of Labor office works in conjunction with the County Workforce Development to manage unemployment benefit claims and services for job seekers who are faced with lots of options for getting back to work. “Today, I have a stack of notices that people are back to work,” she stated, “But the worst was in 2009.” They had to hire more staff to handle the increased number of unemployed in area.

A perfect example was in July 2009, Parker Hannifin in Lyons began the gradual layoff of 230 local people. The Workforce Development staff went in before the closing and met with workers to begin planning a proactive approach to job loss. Since then it has leveled off but the office is still busy doing assessments, occupational planning, job leads, career counseling, and discussing schooling and skills training. “It is a comprehensive process and long-term approach,”  Vangelder said.

According to New York State Dept of Labor Statistics, the job growth has been above 1% per month overall since mid-2010, bouncing back from the massive 2009 job loss. During that time, New York, along with many other states, were paying massive Unemployment Insurance benefits to unemployed workers, which the federal government extended numerous times. Today, the interest on that money is due and the state government is asking employers to pay, once again.