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June 24, 1998

Another UI victory: Legislature passes Council-backed bill to reform UI system
Operation Pre-Pay savings locked in; tax tables, other reforms to save millions more

The Business Council has scored a major victory on one of its top legislative priorities: a comprehensive unemployment insurance (UI) reform bill.

Governor Pataki is expected to sign the bill, which would:

"These reforms will ensure the solvency of the UI system while cutting employers' costs," said Daniel B. Walsh, president of The Business Council.

"New York employers will save up to $54 per employee," he added. "That's millions of dollars in savings for our members and all New York employers."

The bill will also lock in the savings that The Council gained for all employers in last year's Operation UI Pre-Pay, which saved most New York employers $63 per employee in UI costs.

Tax table reform: New UI tax tables have been a Business Council priority for years, The Council's lead negotiator on the reform package.

He noted that the reform bill meets The Council's key goal: more "experience rating" in UI tax tables. This ensures that employers' actual UI tax rates more accurately reflect their experiences with the UI system.

Wage reporting system: The new wage reporting systems will save employers million of dollars in time and material now spent on paperwork, Pugliese said.

Now, whenever an applicant seeks benefits, his employer is queried about earnings and length of employment.

Under the reform bill, all New York employers will send the state Department of Labor quarterly reports with that information on all employees.

"This is a huge reduction in paperwork and, as a result, a huge savings for employers," Pugliese noted.

Benefits increase: The bill will increase the maximum benefits to $365 per week as of September 1, 1998 - half the average weekly earnings in New York. A second one-time adjustment on September 1, 2000 will adjust benefits to no more than 50 percent of the average weekly wages at that time.

Savings from Operation Pre-Pay: The reform bill will make permanent 1997 UI tax cuts from Operation UI Pre-Pay, an effort conceived and conducted by The Business Council to reduce UI taxes.

In Operation Pre-Pay, The Business Council got employers to make pre-payments on their 1998 UI taxes to trigger a rate decrease. Employers from around New York State made more than $171 million in pre-payments.

The reform bill makes that tax cut permanent because it eliminates the "supplemental tax" by blending it with the experience-rated tax, Pugliese noted.

Click here for The Business Council's news release.