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Zack Hutchins
Director of Communications

January 23, 1998 

Labor Department asks business to help reform the UI system

A top official with the state Department of Labor (DOL) has urged The Business Council to play an active role in the dialogue on possible reform in the state's unemployment insurance system.

"It's your money that funds the system," James Dillon, DOL Executive Deputy Commissioner, reminded the business community in a special briefing of the Council's Government Affairs Committee Jan. 20 at Council headquarters.

"It's a huge amount of money, and the business community should be taking an intense interest in it," he added.

Dillon said the specifics of the Pataki administration's plans for reforming New York's unemployment insurance system are still being discussed within the Governor's staff and that he was therefore unable to discuss any specific possibilities. However, he did indicate that a reform bill that was floated last year was a starting point for these discussions.

Dillon discussed the importance of at least one issue that is a central focus of The Business Council's 1998 Legislative Agenda: the need to develop more equitable tax rate table that gives a break to so-called "positive account" employers, those with few layoffs.

The Council's Legislative Agenda also calls for creation of separate "general accounts" for taxable employers, reimbursable government employers, and reimbursable private employers. The Council also urges a tightening of requalification standards and other fundamental reforms to qualifying standards.

Dillon noted that the Department of Labor had been pleased to provide technical advice and "back-end" support to The Business Council in its recent successful effort to convince businesses statewide to pre-pay unemployment insurance premiums in the final quarter of 1997. This effort produced $171 in pre-payments, resulting in $420 million unemployment insurance tax cut that will benefit all businesses in New York State.

Notwithstanding this success, Dillon said the business community cannot rest on its laurels. "We must make sure that the '97 tax cut does not become the '98 tax increase. Without unemployment insurance reform taken seriously, that's always a possibility." He urged The Business Council to pay close heed to UI reform so that it is not swept off the table in last-minute horse tradin.