Employers in New York State this month will make their first payment on unemployment insurance (UI) taxes at the lower rate created by The Business Council's pre-payment initiative of late 1997.
All New York State employers pay UI taxes quarterly. The first quarter's payment is due on April 30 of each year, explained Richard Schwarz, The Business Council's tax counsel.
This year, employers will send $420 million less to Albany than they did last year. The reduction is between $49 and $63 per employee.
The Business Council has completed an analysis of who participated in the pre-pay initiative.
- There were 2,506 companies that made pre-payments, representing a range of companies from Fortune 500 giants to barber shops and bakeries.
- The smallest pre-payment was $18 - made by a seasonal employer with virtually no payroll in the first quarter.
- The largest pre-payment was $12.4 million.
- The average pre-payment was $68,513.
- Twenty-eight employers paid more than $1 million; 42 employers pre-paid less than $100.
- Businesses that made pre-payments include restaurants, retailers, manufacturers, financial institutions, hospitals, law firms, business groups, telecommunications firms, construction companies, fisheries, insurance businesses, farms, resorts, transportation companies, utilities, religious groups, nursing homes, and The Business Council itself.
This tax cut was made possible by a massive effort late in 1997-developed and led by The Business Council-to convince employers to make pre-payments on their 1998 UI taxes.
The Business Council realized that, with enough pre-payments, the state's UI fund would be pushed above $930 million. Under law, tax rates go down when the fund reaches this level. The effort was conceived by Schwarz, who had been tracking the level of the UI trust fund for several years, seeking an opportunity to trigger a rate decrease.
The Council's initiative prompted $171 million in pre-payments, far above the approximately $130 million needed to ensure the 1998 tax reduction.
Business Council staff sent more than 12,000 broadcast faxes promoting participation in the plan and informing companies of its progress.
They also called hundreds of human resources officers and other executives within member and non-member companies, urging them to participate in the pre-payment initiative.