NYS DOL Cancels Unemployment Insurance Charges Until Further Notice

Harris Beach PLLC

On January 14, 2021, New York State Department of Labor (“DOL”) Commissioner Roberta Reardon signed an Order that temporarily cancels unemployment insurance (“UI”) charges to employers for the duration of the COVID-19 pandemic. Notably, the Order applies retroactively to certain UI charges already incurred by employers. The Order became effective immediately upon signature.

According to the Order, all UI benefits paid to claimants beginning on March 9, 2020 will be charged to New York State’s general UI account—and not attributable to employers—until further notice. This modification applies to all employers, regardless of whether the employer pays UI taxes based on experience rating or directly reimburses the State for UI benefits paid to claimants. The Order does not, however, indicate whether employers will still be required to pay UI taxes.

For those employers who pay UI taxes based on experience rating, the Order should effectively protect employers’ experience ratings from being negatively impacted. Accordingly, this Order is much welcomed by such employers, especially in light of the unprecedented number of UI claims which continue to be filed across the State.

The Order benefits certain other employers as well. Under the federal Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”), self-insured nonprofits, government agencies, and Native American tribes are already provided 50 percent relief for unemployment charges incurred between March 13, 2020 and December 31, 2020. Pursuant to the Order, the State will reimburse these employers the remaining 50 percent of the charges incurred during that period. Additionally, the Order provides that future charges which would otherwise be charged to their accounts will instead be charged to the State’s general UI account until further notice.

While the Order does not indicate how the State will reimburse employers for UI charges already incurred on or after March 9, 2020, it is possible said reimbursement will be in the form of a credit against future UI charges.

This Order is certainly good news for employers. However, employers should continue to review all charge statements, bills, and any other documents issued by the DOL in a timely manner and protest claims as necessary. Importantly, employers should also continue to monitor for and report any potentially fraudulent claims to the DOL, especially considering such claims are on the rise. (For more information on reporting UI benefits fraud, click here.)

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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