Surcharge Scheduled to be Phased Out Next Year
Governor Cuomo announced that the 2015 Unemployment Insurance Interest Assessment Surcharge will decrease to the lowest level in five years and is scheduled to be phased out by 2016.
“The sharp reduction and eventual elimination of this fee on businesses shows the strength of New York’s rebounding private sector and the effectiveness of this administration’s efforts to grow this state’s economy and reform the Unemployment Insurance Trust Fund,” Governor Cuomo said. “This is yet another example of how New York is on the move.”
This year, the average business will be assessed less than one dollar per employee ($0.93). In addition, more than 123,000 employers that have an amount due of less than $1.00 will not receive an Interest Assessment Surcharge (IAS) bill at all. Unemployment Insurance reforms, along with improved economic conditions, have led to the Unemployment Insurance Trust Fund achieving a positive balance for the first time since 2009 and an Interest Assessment Surcharge rate that has dropped from $21.25 per employee in 2011 to just $0.93 per employee for 2015.
For seven years, the State’s Unemployment Insurance Trust Fund did not have enough funds to pay for claims filed by unemployed workers. As a result, New York was forced to borrow funds from the federal government to cover the difference and, as required by law, employers were assessed a temporary IAS to pay the interest on the $3.5 billion debt.
In March 2013, Governor Cuomo signed into law a major reform to the State’s Unemployment Insurance System. Included in the law was a mechanism to pay back the federal loan faster as well as add fund stability and, therefore, predictability for employers. Much like paying off the balance of a credit card early to avoid escalating interest costs, the reform law was designed to repay the Trust Fund loan sooner, saving New York businesses an estimated $200+ million in interest.
Acting Labor Commissioner Mario J. Musolino said, “This rate reduction is welcome news for New York’s businesses, who can look forward to another year of continued assessment relief.”
For questions regarding the IAS, please contact the Department of Labor at
(888) 899-8810 or visit: www.labor.ny.gov/ui/employerinfo/interest-assessment-surcharge.shtm