NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A3904
SPONSOR: Simon TITLE OF BILL:
An act to amend the labor law, in relation to the unemployment insurance
law, increasing the maximum benefit rate for unemployment insurance
PURPOSE OR GENERAL IDEA OF BILL:
The bill intends to increase the maximum weekly unemployment benefit
rate and restore fiscal health to the state's Unemployment Insurance
Trust Fund.
SUMMARY OF SPECIFIC PROVISIONS:
Section one of the bill amends section 518 of the Labor Law to gradu-
ally increase the taxable wage base for employer contributions to the
Unemployment Insurance Trust fund until 2017, after which the Department
of Labor would calculate the wage base needed to fund annual increases
for the maximum weekly benefit.
Section two of the bill amends section 590 of the Labor Law to
increase in the maximum weekly unemployment benefit rate to $475 as of
July 2014, to $525 as of July 2016, to $600 as of July 2017, to $650 as
of July 2048, after which the maximum, weekly benefit would equal one-
half of the state average weekly wage as annually calculated by the
State Department of Labor.
Section three establishes the effective date
JUSTIFICATION:
New York State's unemployment rate reached 8.8% in January 2030 with
more than 851,970 New Yorkers out of work. In the New York City metro-
politan area, the rate is over 10%, and disproportionately higher for
Hispanics at 23% and 38.7% for African-Americans. The State's long-term
unemployment rate, which tracks those who are unemployed for 27 weeks or
more, was 34% in 2009 exceeding the national average of 31.5%.
The State's unemployment benefit rate, and taxable wage base have not
been raised since 1998. Due to the large number of persons filing for
unemployment benefits, the Unemployment Insurance Trust Fund has become
insolvent. The State has had to borrow from the federal government to
pay benefits and will owe more than $3.5 billion by the end of the year.
This deficit is expected to rise by an additional $1 billion during each
of the next few years if nothing is done to address the problem.
The limited amount of stimulus funds provided under the American Recov-
ery and Reinvestment Act of 2009 (ARRA) does not resolve this long-term
crisis to the Trust Fund. Both employers and the State will face signif-
icant new costs if the Trust Fund is not restored to fiscal health
continued insolvency of the Fund will result in higher federal unemploy-
ment taxes for employers. When the Fund is solvent, employers may
receive a federal credit reduction against the 6.2% federal tax they pay
under the Federal Unemployment Trust Act (FUTA), which reduces their tax
liability to .8%. When the Fund lacks sufficient contributions to repay
borrowed money by the federal deadlines, the FUTA credit is reduced,
which increases the net federal tax rate for employers. Without this
legislation, the increased tax cost to New York employers is projected
to reach $6.4 billion during the period of 2009-2018.
The failure to increase the taxable wage base will also cost the State
millions of dollars in interest on its federal loan. Under the bill,
however, the State's interest on the loan would continually decline
until 2016, when the Trust Fund's solvency would be restored. New York's
taxable wage base of $8,500 is significantly lower than most other
states, including New jersey ($29,700), Connecticut ($15,000) and Massa-
chusetts ($14,000).
The legislation would also increase the maximum weekly benefit rate of
$405 which was enacted more than a decade ago. Since then, the spending
power of $405 has declined by more than 21% to approximately $322. The
current benefit rate is based on one-half of the state's average weekly
wage in 1998. If this rate were adjusted to the current average weekly
wage, the benefit would be closer to $575. The legislation proposes a
more modest increase in the initial years following enactment in an
effort to strike a balance between the need to increase benefits and
raise employer contributions. New York's current benefit level places
many unemployed workers and their families below the poverty threshold.
The state's weekly benefit rate is much lower than that of nearby states
including New Jersey ($600), Connecticut ($537), and Massachusetts
($628). In Oregon, which indexes unemployment benefits to keep pace with
inflation, the benefit was increased to $493 two years ago.
The need to raise unemployment benefits and the taxable wage base grows
more urgent each year. Because benefits have not been increased, workers
who have recently received extended unemployment benefits from the
federal government have been deprived of additional income they and
their families need at this difficult time. The failure to act also
hurts local economies. Studies show that every dollar provided to work-
ers returns approximately $1.64 through local purchases for rent, food
and other basics, which in turn helps local businesses and generates tax
revenues.
The unemployment system was established to help New Yorkers support
themselves after they lose their jobs through no fault of their own
until they can find new work. This legislation will protect New York's
unemployment system by ensuring the fiscal health of the Trust Fund, and
in so doing, help avoid new costs for employers and the State if solven-
cy of the Fund is not restored.
PRIOR LEGISLATIVE HISTORY:
2023-24: A7911 Simon -referred to labor
2021-22: A7150 Richardson -referred to labor
2019-20: A02158
FISCAL IMPLICATIONS:
to be determined
EFFECTIVE DATE:
This act shall take effect immediately
STATE OF NEW YORK
________________________________________________________________________
3904
2025-2026 Regular Sessions
IN ASSEMBLY
January 30, 2025
___________
Introduced by M. of A. SIMON -- read once and referred to the Committee
on Labor
AN ACT to amend the labor law, in relation to the unemployment insurance
law, increasing the maximum benefit rate for unemployment insurance
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. Paragraph (a) of subdivision 1 of section 518 of the labor
2 law, as amended by section 1 of part O of chapter 57 of the laws of
3 2013, is amended to read as follows:
4 (a) "Wages" means all remuneration paid, except that such term does
5 not include remuneration paid to an employee by an employer after eight
6 thousand five hundred dollars have been paid to such employee by such
7 employer with respect to employment during any calendar year, except
8 that such term does not include remuneration paid to an employee by an
9 employer with respect to employment during any calendar year beginning
10 with the first day of
11 that exceeds
12 January 2014 $10,300
13 January 2015 $10,500
14 January 2016 $10,700
15 January 2017 $10,900
16 January 2018 $11,100
17 January 2019 $11,400
18 January 2020 $11,600
19 January 2021 $11,800
20 January 2022 [$12,000] $12,500
21 January 2023 [$12,300
22 January 2024 $12,500
23 January 2025 $12,800
24 January 2026 $13,000
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD06411-01-5
A. 3904 2
1 and each year thereafter on the first day of January that exceeds
2 sixteen percent of the state's average annual wage as determined by the
3 commissioner on an annual basis pursuant to section five hundred twen-
4 ty-nine of this article; provided, however, that in calculating such
5 maximum amount of remuneration, the amount arrived at by multiplying the
6 state's average annual wage times sixteen percent shall be rounded up to
7 the nearest hundred dollars. In no event shall the state's annual aver-
8 age wage be reduced from the amount determined in the previous year]
9 $13,500
10 In each succeeding calendar year, the department shall calculate the
11 base amount of remuneration necessary from which to produce sufficient
12 premium to provide for the annual increases in maximum weekly benefit
13 provided for in this article, and other funding for the unemployment
14 insurance trust fund pursuant to section five hundred fifty of this
15 article, as may be necessary. The term "employment" includes for the
16 purposes of this subdivision services constituting employment under any
17 unemployment compensation law of another state or the United States.
18 § 2. Paragraph (a) of subdivision 5 of section 590 of the labor law,
19 as amended by section 8 of part O of chapter 57 of the laws of 2013, is
20 amended to read as follows:
21 (a) A claimant's weekly benefit amount shall be one twenty-sixth of
22 the remuneration paid during the highest calendar quarter of the base
23 period by employers, liable for contributions or payments in lieu of
24 contributions under this article, provided the claimant has remuneration
25 paid in all four calendar quarters during [his or her] such claimant's
26 base period or alternate base period. However, for any claimant who has
27 remuneration paid in all four calendar quarters during [his or her] such
28 claimant's base period or alternate base period and whose high calendar
29 quarter remuneration during the base period is three thousand five
30 hundred seventy-five dollars or less, the benefit amount shall be one
31 twenty-fifth of the remuneration paid during the highest calendar quar-
32 ter of the base period by employers liable for contributions or payments
33 in lieu of contributions under this article. A claimant's weekly benefit
34 shall be one twenty-sixth of the average remuneration paid in the two
35 highest quarters paid during the base period or alternate base period by
36 employers liable for contributions or payments in lieu of contributions
37 under this article when the claimant has remuneration paid in two or
38 three calendar quarters provided however, that a claimant whose high
39 calendar quarter is four thousand dollars or less but greater than three
40 thousand five hundred seventy-five dollars shall have a weekly benefit
41 amount of one twenty-sixth of such high calendar quarter. However, for
42 any claimant who has remuneration paid in two or three calendar quarters
43 during [his or her] such claimant's base period or alternate base period
44 and whose high calendar quarter remuneration during the base period is
45 three thousand five hundred seventy-five dollars or less, the benefit
46 amount shall be one twenty-fifth of the remuneration paid during the
47 highest calendar quarter of the base period by employers liable for
48 contributions or payments in lieu of contributions under this article.
49 Any claimant whose high calendar quarter remuneration during the base
50 period is more than three thousand five hundred seventy-five dollars
51 shall not have a weekly benefit amount less than one hundred forty-three
52 dollars. The weekly benefit amount, so computed, that is not a multiple
53 of one dollar shall be [lowered to] the next multiple of one dollar. On
54 the first Monday of September, nineteen hundred ninety-eight the weekly
55 benefit amount shall not exceed three hundred sixty-five dollars nor be
56 less than forty dollars, until the first Monday of September, two thou-
A. 3904 3
1 sand, at which time the maximum benefit payable pursuant to this subdi-
2 vision shall equal one-half of the state average weekly wage for covered
3 employment as calculated by the department no sooner than July first,
4 two thousand and no later than August first, two thousand, rounded
5 [down] to the [lowest] next dollar. On and after the first Monday of
6 October, two thousand fourteen, the weekly benefit shall not be less
7 than one hundred dollars, nor shall it exceed four hundred twenty
8 dollars until the first Monday of October, two thousand fifteen when the
9 maximum benefit amount shall be four hundred twenty-five dollars, until
10 the first Monday of October, two thousand sixteen when the maximum bene-
11 fit amount shall be four hundred thirty dollars, until the first Monday
12 of October, two thousand seventeen when the maximum benefit amount shall
13 be four hundred thirty-five dollars, until the first Monday of October,
14 two thousand eighteen when the maximum benefit amount shall be four
15 hundred fifty dollars, until the first Monday of October, two thousand
16 nineteen when the maximum benefit amount shall be thirty-six percent of
17 the average weekly wage until the first Monday of October, two thousand
18 twenty when the maximum benefit amount shall be thirty-eight percent of
19 the average weekly wage, until the first Monday of October two thousand
20 twenty-one when the maximum benefit amount shall be [forty percent of
21 the average weekly wage] six hundred fifty dollars, until the first
22 Monday of October, two thousand twenty-two when the maximum benefit
23 amount shall [be forty-two percent of the average weekly wage, until the
24 first Monday of October, two thousand twenty-three when the maximum
25 benefit amount shall be forty-four percent of the average weekly wage,
26 until the first Monday of October, two thousand twenty-four when the
27 maximum benefit amount shall be forty-six percent of the average weekly
28 wage, until the first Monday of October, two thousand twenty-five when
29 the maximum benefit amount shall be forty-eight percent of the average
30 weekly wage, until the first Monday of October, two thousand twenty-six
31 and each year thereafter on the first Monday of October when the maximum
32 benefit amount shall be fifty percent of the average weekly wage
33 provided, however, that in no event shall the maximum benefit amount be
34 reduced from the previous year] equal one-half of the state average
35 weekly wage as calculated by the department no sooner than July first,
36 two thousand twenty-six and not later than August first, two thousand
37 twenty-six and on July first of each succeeding year the maximum benefit
38 shall equal one-half of the state average weekly wage as calculated by
39 the department annually pursuant to the manner described in this subdi-
40 vision. For purposes of this subdivision, the term "state average weekly
41 wage" shall mean the average weekly wage of the state for the previous
42 calendar year as reported by the commissioner to the superintendent of
43 financial services on March thirty-first.
44 § 3. This act shall take effect immediately and shall apply to all
45 claims filed on and after the effective date of this act; provided,
46 however, that section one of this act shall take effect on the thirtieth
47 day after it shall have become a law.
