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New York Unemployment Insurance Update

December 31st, 2006 Posted by Mark

Here is an interesting question that we haven’t looked at yet. We took a look so far in this blog at how states deal with employers who are nonprofit companies, agricultural companies, small companies, and new companies when it comes to charging on unemployment insurance. We have also looked at how states deal with companies that are large employers and have employees in multiple states spread across this great land of ours.

But have we looked at an employer that no longer is an operating business, whether because they closed shop, went bankrupt, or just retired and quit? Well, we have considered one similar situation: when a company is bought out by another company. In that case, the new buying company assumes the unemployment insurance tax liability and experience rating for the old bought company.

But let’s say a company just goes out of business. No one else buys them or acquires them. The company just fades into the long list of companies that were has beens, the long list of failed and closed businesses. What happens to their unemployment insurance liability in this case? Is it nil and void? Does the state pick up the tab for some of those former employees of this company? For all of the former employees?

Well, at least in the state of New York, a so called “closed” unemployment insurance tax account can still receive notices that it is being charged by former employees who are claiming unemployment insurance benefits against it. And even in this case, if you are the former employer, it is your job to still review these benefits charges and make sure they are correct and justified.

If down the road you can actually rehire the employees you had to let go, you are encouraged by the state of New York to do so by contacting the former employees directly.