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Legislative Memo

Lev Ginsburg
Director of Government Afairs
T 518.465.7511 x207
www.bcnys.org

BILL:

A.8100 (John)

Support

SUBJECT:

Expanding unemployment benefits eligibility standards; increasing unemployment benefits; and indexing benefits and the taxable wage base

 

DATE:

May 12, 2009

 

This bill proposes changes to the Labor Law to conform to standards set forth in the American Recovery and Reinvestment Act of 2009 "unemployment compensation modernization" section; a 4 year stepped-up increase in the maximum unemployment benefit level; a 4 year stepped-up increase in the employer taxable wage base; and, starting in 2013 indexes the maximum unemployment benefit to one-half the state's average weekly wage while providing the Commissioner of Labor with the authority to set the employer taxable wage base at a level sufficient to fund the increases in benefits authorized by the act.  

The Business Council opposes this bill as it seeks to accomplish unemployment insurance benefit expansion and benefit increases without any substantive approach to unemployment insurance reform in New York State. 

The Business Council has previously issued a memo in support of S 4110-A/A8273 which deals solely with eligibility issues addressed in the American Recovery and Reinvestment Act.  This proposed bill leaves intact "compelling family reason" language which The Business Council feels is overly broad, and for which the United States Department of Labor has clarification subsequent to the adoption of the ARRA. 

The Business Council also opposes those provisions within this bill which would increase the maximum unemployment benefit from a current level of $405 per week, to a level of $625 in 2012, increasing employers' costs 53%.  With an average employer tax liability rate of 3.7%, the employer cost for increasing the benefits will rise from an average of $297.50 per employee to $490 per employee.  The bill proposes to fund the increase in benefits through increasing the employer taxable wage base which puts an increased burden on all employers regardless of their "use" of the system.   Finally, the bill proposes to index benefits and the taxable wage base starting in 2013, a process which would remove any incentive and opportunity for stakeholders to periodically review and reform the unemployment insurance system.

The Business Council has indicated a willingness to negotiate with legislators and stakeholders unemployment insurance reforms, including a benefit increase.  We do not support legislation which expands eligibility, increases employer costs with no regard to reforms which could improve the effectiveness and efficiency of the system. 

In a year where legislators increased employers' costs significantly through the imposition of $700 million in increased health insurance benefit taxes; increased taxes of an estimated $325 million a year on business utility bills to all ratepayers; and imposed a new payroll excise tax on all employers in the 12-county MTA region, it is incomprehensible that yet another tax increase would be imposed on employers without substantive conversations about reforming the unemployment insurance system.  An increase in unemployment insurance taxes on all tax-rated employers in an 'eligibility', not 'entitlement', based system should not be considered without all parties having the opportunity to discuss system reforms.

For these reasons, The Business Council opposes this bill.