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New York Unemployment Insurance Law

August 7th, 2006 Posted by Lindsay

Like many states, New York state offers unemployment insurance benefits for eligible workers who become employed through no fault of their own. The benefits come from taxes that are paid by the employer, not from the workers themselves. Eligible parties must be ready, willing and able to work, and must be approved by the Department of Labor.

People who are not covered by unemployment insurance include some agricultural laborers, illegal aliens, baby-sitters under age 18, caretakers and performers employed at a place of religious worship, casual laborers, domestic employees, immediate children under 21 or spouse of a sole proprietor, golf caddies, some government employees, railroad workers who are covered under the Federal Railroad Unemployment Insurance act,.

I noticed that seasonal workers as well as part time workers generally are covered under New York’s Unemployment Insurance Law. Most college students are also covered. The coverage for these three groups of employees may not be generally known to the public; it’s important that any worker who becomes unemployed check with the Department of Labor to see if they actually qualify for temporary benefits.

One interesting recent change to the Unemployment Tax took effect on January 1, 2006. Called the SUTA Dumping Prevention Act, the Act prohibits businesses from manipulating the tax rating system. A business may do this by attempting to transfer its workforce (or part of its workforce) in order to reduce their unemployment liability. It’s also considered SUTA dumping if a person acquires a business only to obtain a lower UI rate.

The penalty for SUTA dumping is the greater of ten percent of the employer’s taxable wages or $10,000. The New York State Department of Labor’s Unemployment Insurance Fraud Control Unit is responsible for investigating such actions. Reports that are made to them are completely confidential.