senate Bill S2245A

Amended

Relates to increasing the maximum benefit rate for unemployment insurance

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Bill Status


  • Introduced
  • In Committee
  • On Floor Calendar
    • Passed Senate
    • Passed Assembly
  • Delivered to Governor
  • Signed/Vetoed by Governor
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  • 13 / Feb / 2009
    • REFERRED TO LABOR
  • 23 / Mar / 2009
    • REPORTED AND COMMITTED TO FINANCE
  • 27 / May / 2009
    • 1ST REPORT CAL.489
  • 01 / Jun / 2009
    • 2ND REPORT CAL.
  • 02 / Jun / 2009
    • ADVANCED TO THIRD READING
  • 16 / Jul / 2009
    • COMMITTED TO RULES
  • 06 / Jan / 2010
    • REFERRED TO LABOR
  • 02 / Mar / 2010
    • AMEND AND RECOMMIT TO LABOR
  • 02 / Mar / 2010
    • PRINT NUMBER 2245A
  • 12 / Mar / 2010
    • AMEND AND RECOMMIT TO LABOR
  • 12 / Mar / 2010
    • PRINT NUMBER 2245B
  • 15 / Mar / 2010
    • REPORTED AND COMMITTED TO FINANCE
  • 25 / Jun / 2010
    • COMMITTEE DISCHARGED AND COMMITTED TO RULES
  • 25 / Jun / 2010
    • ORDERED TO THIRD READING CAL.1285

Summary

Relates to increasing the maximum benefit rate for unemployment insurance.

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Bill Details

See Assembly Version of this Bill:
A4921A
Versions:
S2245
S2245A
S2245B
Legislative Cycle:
2009-2010
Law Section:
Labor Law
Versions Introduced in 2007-2008 Legislative Cycle:
S8742, A11642

Sponsor Memo

BILL NUMBER: S2245A

TITLE OF BILL :
An act to amend the labor law, in relation to the unemployment
insurance law, increasing the maximum benefit rate for unemployment
insurance


PURPOSE :
The bill intends to increase the maximum weekly unemployment benefit
rate and restore fiscal health to the state's Unemployment Insurance
Trust Fund.

SUMMARY OF PROVISIONS :
Section one of the bill amends section 518 of the labor law to
gradually increase the taxable wage base for employer contributions to
the Unemployment Insurance Trust fund until 2013, after which the
Department of Labor would calculate the wage base needed to fund
annual increases for the maximum weekly benefit.

Section two of the bill amends section 590 of the Labor Law to
increase in the maximum weekly unemployment benefit rate to $475 as of
July 2010, to $525 as of July 2011, to $575 as of July 2012, to $625
as of July 2013, after which the maximum weekly benefit would equal
one-half of the state average weekly wage as annually calculated by
the State Department of Labor.

Section three establishes the effective date.

JUSTIFICATION :
New York State's unemployment rate has reached 9%, matching a 26-year
high. More than 868,600 New Yorkers are out of work. In the New York
City metropolitan area, the rate is over 10%, and disproportionately
higher for Hispanics at 23% and 38.7% for african-americans. The
State's long-term unemployment rate, which tracks those who are
unemployed for 27 weeks or more, was 34% in 2009 exceeding the
national average of 31.5%.

The State's unemployment benefit rate and taxable wage base have not
been raised since 1998. Due to the large number of persons filing for
unemployment benefits, the Unemployment Insurance Trust Fund has
become insolvent. The State has had to borrow from the federal
government to pay benefits and will owe more than $3.5 billion by the
end of the year. This deficit is expected to rise by an additional $1
billion during each of the next few years if nothing is done to
address the problem.

The limited amount of stimulus funds provided under the American
Recovery and Reinvestment Act of 2009 (ARRA) does not resolve this
long-term crisis to the Trust Fund. Both employers and the State will
face significant new costs if the Trust Fund is not restored to fiscal
health. The continued insolvency of the Fund will result in higher
federal unemployment taxes for employers. When the Fund is' solvent,
employers may receive a federal credit reduction against the 6.2%
federal tax they pay under the Federal Unemployment Trust Act (FUTA),
which reduces their tax liability to .8%. When the Fund lacks
sufficient contributions to repay borrowed money by the federal
deadlines, the FUTA credit is reduced, which increases the net federal
tax rate for employers. Without this legislation, the increased tax
cost to New York employers is projected to reach $6.4 billion during
the period of 2009-2018.

The failure to increase the taxable wage base will also cost the State
millions of dollars in interest on its federal loan. Although the ARRA
waived some interest for a brief period, New York will owe more than
$160 million in interest by 2011, which is projected to increase to
$210 million in 2012 and to a total of $840 million over the following
five years. Under the bill, however, the State's interest on the loan
would continually decline until 2016, when the Trust Fund's solvency
would be restored. New York's taxable wage base of $8500 is
significantly lower than most other states, including New Jersey
($29,700), Connecticut ($15,000) and Massachusetts ($14,000).

The legislation would also increase the maximum weekly benefit rate of
$405 which was enacted more than a decade ago. Since then, the
spending power of $405 has declined by more than 20% to approximately
$322. The current benefit rate is based on one-half of the state's
average weekly wage in 1998. If this rate were adjusted to the current
average weekly wage, the benefit would be closer to $575. The
legislation proposes a more modest increase in the initial years
following enactment in an effort to strike a balance between the need
to increase benefits and raise employer contributions. New York's
current benefit level places many unemployed workers and their
families below the poverty threshold. The state's weekly benefit rate
is much lower than that of nearby states including New Jersey ($600),
Connecticut ($537), and Massachusetts ($628). In Oregon, which indexes
unemployment benefits to keep pace with inflation, the benefit was
increased to $493 last year.

The need to raise unemployment benefits and the taxable wage base
grows more urgent each year. Because benefits have not been increased,
workers who have recently received extended unemployment benefits from
the federal government have been deprived of additional income they
and their families need at this difficult time. The failure to act
also hurts local economies. Studies show that every dollar provided to
workers returns approximately $1.64 through local purchases for rent,
food and other basics, which in turn helps local businesses and
generates tax revenues.

The unemployment system was established to help New Yorkers support
themselves after they lose their jobs through no fault of their own
until they can find new work. This legislation will protect New York's
unemployment system by ensuring the fiscal health of the Trust Fund,
and in so doing, help avoid new costs for employers and the State if
solvency of the Fund is not restored.

LEGISLATIVE HISTORY :
2009: S.2245 - Advanced to 3rd Reading;
A.4921 - Advanced to Ways & Means
2008: S.8742 - Referred to Rules;
A.11642 - Advanced to Ways & Means

EFFECTIVE DATE :
This bill will take effect immediately, provided that section one will
take effect 30 days after it becomes law.
view bill text
                    S T A T E   O F   N E W   Y O R K
________________________________________________________________________

                                 2245--A

                       2009-2010 Regular Sessions

                            I N  S E N A T E

                            February 13, 2009
                               ___________

Introduced  by  Sens. ONORATO, ADAMS, ADDABBO, AUBERTINE, BRESLIN, DIAZ,
  DILAN, HASSELL-THOMPSON, HUNTLEY, KRUEGER, LANZA, OPPENHEIMER, PARKER,
  PERKINS, SAVINO, SCHNEIDERMAN, SERRANO, SQUADRON,  STACHOWSKI,  STAVI-
  SKY,  STEWART-COUSINS, THOMPSON -- read twice and ordered printed, and
  when printed to be committed to the Committee on Labor --  recommitted
  to  the Committee on Labor in accordance with Senate Rule 6, sec. 8 --
  committee discharged, bill amended, ordered reprinted as  amended  and
  recommitted to said committee

AN ACT to amend the labor law, in relation to the unemployment insurance
  law, increasing the maximum benefit rate for unemployment insurance

  THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:

  Section 1. Paragraph (a) of subdivision 1 of section 518 of the  labor
law,  as  amended by chapter 589 of the laws of 1998, is amended to read
as follows:
  (a) "Wages" means all remuneration paid, except that  such  term  does
not include remuneration paid to an employee by an employer after [eight
thousand  five  hundred]  NINE THOUSAND SEVEN HUNDRED FIFTY dollars have
been paid to such employee by such employer with respect  to  employment
during  any  calendar year PRECEDING THE FIRST DAY OF JANUARY, TWO THOU-
SAND ELEVEN, NOR TO INCLUDE REMUNERATION  PAID  TO  AN  EMPLOYEE  BY  AN
EMPLOYER  AFTER  ELEVEN  THOUSAND FIVE HUNDRED DOLLARS HAVE BEEN PAID TO
SUCH EMPLOYEE BY SUCH EMPLOYER WITH RESPECT  TO  EMPLOYMENT  DURING  ANY
CALENDAR  YEAR  PRECEDING THE FIRST DAY OF JANUARY, TWO THOUSAND TWELVE,
NOR TO INCLUDE REMUNERATION PAID TO AN EMPLOYEE  BY  AN  EMPLOYER  AFTER
THIRTEEN  THOUSAND  DOLLARS  HAVE  BEEN  PAID  TO  SUCH EMPLOYEE BY SUCH
EMPLOYER WITH RESPECT TO EMPLOYMENT DURING ANY CALENDAR  YEAR  PRECEDING
THE  FIRST  DAY  OF  JANUARY,  TWO THOUSAND THIRTEEN. IN EACH SUCCEEDING
CALENDAR YEAR, THE DEPARTMENT SHALL CALCULATE THE BASE AMOUNT OF  REMUN-
ERATION  NECESSARY  FROM  WHICH TO PRODUCE SUFFICIENT PREMIUM TO PROVIDE
FOR THE ANNUAL INCREASES IN MAXIMUM WEEKLY BENEFIT PROVIDED FOR IN  THIS

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD07363-03-0

S. 2245--A                          2

ARTICLE,  AND  OTHER  FUNDING  FOR THE UNEMPLOYMENT INSURANCE TRUST FUND
PURSUANT TO SECTION FIVE HUNDRED FIFTY OF THIS ARTICLE, AS MAY BE NECES-
SARY. The term "employment" includes for the purposes of  this  subdivi-
sion  services  constituting  employment  under any unemployment compen-
sation law of another state or the United States.
  S 2. Subdivision 5 of section 590 of the  labor  law,  as  amended  by
chapter 413 of the laws of 2003, is amended to read as follows:
  5. Benefit rate. A claimant's weekly benefit amount shall be one twen-
ty-sixth of the remuneration paid during the highest calendar quarter of
the  base  period  by employers, liable for contributions or payments in
lieu of contributions under this article. However, for  claimants  whose
high calendar quarter remuneration during the base period is three thou-
sand five hundred seventy-five dollars or less, the benefit amount shall
be one twenty-fifth of the remuneration paid during the highest calendar
quarter  of  the  base  period  by employers liable for contributions or
payments in lieu of contributions under  this  article.    Any  claimant
whose  high calendar quarter remuneration during the base period is more
than three thousand five hundred seventy-five dollars shall not  have  a
weekly  benefit  amount  less  than one hundred forty-three dollars. The
weekly benefit amount, so computed, that is not a multiple of one dollar
shall be [lowered to] the next multiple of  one  dollar.  On  the  first
Monday  of  September,  nineteen hundred ninety-eight the weekly benefit
amount shall not exceed three hundred sixty-five  dollars  nor  be  less
than  forty  dollars, until the first Monday of September, two thousand,
at which time the maximum benefit payable pursuant to  this  subdivision
shall  equal  one-half  of  the  state  average  weekly wage for covered
employment as calculated by the department no sooner  than  July  first,
two  thousand  and  no  later  than  August first, two thousand, rounded
[down] to the [lowest] NEXT dollar.  ON THE FIRST MONDAY  OF  JULY,  TWO
THOUSAND  TEN, THE WEEKLY BENEFIT SHALL NOT EXCEED FOUR HUNDRED SEVENTY-
FIVE DOLLARS NOR LESS THAN SEVENTY-FIVE DOLLARS, UNTIL THE FIRST  MONDAY
OF  JULY, TWO THOUSAND ELEVEN AT WHICH TIME THE WEEKLY BENEFIT SHALL NOT
EXCEED FIVE HUNDRED TWENTY-FIVE DOLLARS, UNTIL THE FIRST MONDAY OF JULY,
TWO THOUSAND TWELVE AT WHICH TIME THE MAXIMUM WEEKLY BENEFIT  SHALL  NOT
EXCEED FIVE HUNDRED SEVENTY-FIVE DOLLARS UNTIL THE FIRST MONDAY OF JULY,
TWO  THOUSAND  THIRTEEN,  AT WHICH TIME THE MAXIMUM WEEKLY BENEFIT SHALL
NOT EXCEED SIX HUNDRED TWENTY-FIVE DOLLARS UNTIL  THE  FIRST  MONDAY  OF
JULY,  TWO  THOUSAND FOURTEEN AT WHICH TIME THE MAXIMUM BENEFIT PURSUANT
TO THIS SUBDIVISION SHALL EQUAL ONE-HALF OF  THE  STATE  AVERAGE  WEEKLY
WAGE  AS  CALCULATED  BY  THE  DEPARTMENT NO SOONER THAN JULY FIRST, TWO
THOUSAND FOURTEEN AND NOT LATER THAN AUGUST FIRST, TWO THOUSAND FOURTEEN
AND ON JULY FIRST OF EACH SUCCEEDING  YEAR  THE  MAXIMUM  BENEFIT  SHALL
EQUAL  ONE-HALF  OF  THE  STATE AVERAGE WEEKLY WAGE AS CALCULATED BY THE
DEPARTMENT ANNUALLY PURSUANT TO THE MANNER DESCRIBED  IN  THIS  SUBDIVI-
SION.
  S  3.  This  act  shall take effect immediately and shall apply to all
claims filed on and after the effective  date  of  this  act;  provided,
however, that section one of this act shall take effect on the thirtieth
day after it shall have become a law.

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