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Government Affairs Albany Update

January 9, 1999

Operation Pre-Pay '99 Successful; Reduces 1999 UC Taxes by $200 Million

In response to requests from its members, The Business Council conducted a pre-payment operation of first quarter 1999 Unemployment Compensation taxes; this year's version raised $62,134,286.04 and put New York's UC Trust Fund over (by some $5 million) the Fund balance necessary to trigger use of a set of UC tax rates lower by 0.4% - $34 per employee - than the set of rates that otherwise would have been in effect in 1999.

Fifty-six companies - covering some 121 separate employer accounts- pre-paid this year's amount during a hectic three-week period of identification, solicitation, pledging, and tracking. By contrast, Operation Pre-Pay '98 raised $171.2 million covering 2,506 employer accounts over a two-month period.

Employers will receive their 1999 UC tax rates in early February. Besides the aggregate UC Trust Fund balance on December 31, 1998, each employer's 1999 tax rate is affected by its own experience with employment during the past year and the new financing law passed by the Legislature in June, 1998. Except for employers with the three best experience ratings, the rates employers receive for 1999 will be lower by 0.4% because of the successful Operation Pre-Pay '99; employers with the best ratings will receive tax rates lowered by 0.3%, 0.2%, and 0.1% because of Operation Pre-Pay '99.

Independent Contractor Task Force

The Governor's Task Force on Independent Contractors met for the first time on December 17, 1998 to begin discussions on how to resolve the independent contractor classification problem in New York State. At this meeting, it was agreed upon by all Task Force members that there was indeed a need for consistency between all agencies and that due to changing industries, action must be taken.

At this initial meeting, presentations were made by all agencies providing a general overview of this issue and the processes used by the various state agencies in making employment determinations. The Task Force has scheduled a second meeting in mid-January to begin discussions on how to structure this relationship in order to achieve the intended results.

In March of 1998, the Governor issued Executive Order No.78 which has since been revised to include two additional seats on the Task Force for both The Business Council and the AFL-CIO, and has extended the due date for the Task Force's final report to the Governor to April 1, 1999.

The Business Council has created an Independent Contractor Work Group for all interested parties. If you wish to participate in this group or have any questions.