Due to the Governor’s Plan, the Assessment for Federal Loans that Employers have Paid for Four Years will be Eliminated
Governor Andrew M. Cuomo today announced that as a result of this administration’s reforms, employers across New York will realize an average savings of $1,200 on their unemployment insurance costs this year.
“In 2013, we put into place sweeping reforms to fix New York’s broken Unemployment Insurance system in a way to help lower costs for employers, offer greater benefits for workers, and increase the integrity of the program," Governor Cuomo said. "Today’s lower assessment is a direct result of these badly needed changes and one more way we are helping to move New York forward.”
The combination of an improved statewide economy and Unemployment Insurance reform measures signed by the Governor in 2013 enabled this loan to be repaid early, saving New York employers an estimated $200 million in interest costs—savings similar to paying off a car loan early. The average employer will see an estimated reduction of nearly $1,200, or $84 per employee.
Unemployment Insurance Reform
For years, New York State's Unemployment Insurance system was broken and could not withstand fluctuations in the economy without borrowing from the federal government, exposing employers to significant and unpredictable liabilities. The system has been either insolvent or on the brink of insolvency for more than a decade.
During the recession, the state’s Unemployment Insurance Trust Fund did not have enough funds to pay for claims filed by unemployed workers. New York, along with many other states, was forced to borrow funds from the Federal Unemployment Insurance Trust Fund to cover the difference, and employers had to pay back a $3.5 billion debt plus interest.
In March 2013, Governor Cuomo signed major reforms into law, which increased benefits for workers, decreased costs to employers, and modernized the Unemployment Insurance system by making it sustainable and self-correcting. The law included a mechanism to pay back the federal loan three years ahead of schedule, resulting in today’s lower costs. In addition, the risk of borrowing from the federal government is now lower and payments for employers will be more predictable than the old system of yearly surcharges.
Unemployment Insurance Reform has also brought new fraud detection and prevention measures to help combat Unemployment Insurance fraud. It also helps to ensure that employers are not charged for a former employee’s claim when the loss of employment was the employee’s fault.
The other factor contributing to paying off the federal Unemployment Insurance loan early and in full is the improved economic conditions of the past several years. When Governor Cuomo came into office in 2011, the New York State unemployment rate was 8.3%. Today, the unemployment rate is 5.1%, and since the beginning of Governor Cuomo’s administration, New York’s economy has added 711,400 private sector jobs and experienced employment growth in 49 of the past 57 months. In September 2015, the number of private sector jobs in the state was 7,821,700.
At the height of the recession in 2009, New York State paid out of the trust fund $5.1 billion in Unemployment Insurance benefits. Unemployment Insurance benefit payments in 2015 are estimated to be $2.4 billion.
Acting Labor Commissioner Roberta Reardon said, “Prior to 2013, the unemployment system was in a continuous cycle of borrowing from the federal government, which saddled New York’s employers with additional principle and interest charges onto New York’s employers. But thanks to an improving economy and the reform measures implemented by Governor Cuomo, the debt has been paid off early—saving millions for employers in the state.”
Spanish Translation Traducción al español
Russian Translation Перевод на русский язык
Korean Translation 한국어 번역
Italian Translation Traduzione italiana
Haitian Creole Translation Tradiksyon kreyòl ayisyen
French Translation Traduction française
Chinese Translation 中文翻譯