senate Bill S2245B

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:
A4921B
Versions:
S2245
S2245A
S2245B
Legislative Cycle:
2009-2010
Law Section:
Labor Law
Laws Affected:
Amd §§518 & 590, Lab L
Versions Introduced in 2007-2008 Legislative Cycle:
S8742, A11642

Votes

9
0
9
Aye
0
Nay
5
aye with reservations
0
absent
2
excused
0
abstained
show Labor committee vote details

Sponsor Memo

BILL NUMBER: S2245B

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
annua.l 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 $600 as of July 2012, to $650
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 reached 8.8% in January 2010 with
more than 851,970 New Yorkers 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--B

                       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 -- 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 TWELVE 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 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  THIRTEEN.  IN  EACH
SUCCEEDING CALENDAR YEAR, THE DEPARTMENT SHALL CALCULATE THE BASE AMOUNT
OF  REMUNERATION  NECESSARY  FROM WHICH TO PRODUCE SUFFICIENT PREMIUM TO

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD07363-08-0

S. 2245--B                          2

PROVIDE FOR THE ANNUAL INCREASES IN MAXIMUM WEEKLY BENEFIT PROVIDED  FOR
IN  THIS ARTICLE, AND OTHER FUNDING FOR THE UNEMPLOYMENT INSURANCE TRUST
FUND PURSUANT TO SECTION FIVE HUNDRED FIFTY OF THIS ARTICLE, AS  MAY  BE
NECESSARY.  The  term  "employment"  includes  for  the purposes of this
subdivision services  constituting  employment  under  any  unemployment
compensation 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 SIX HUNDRED DOLLARS UNTIL THE FIRST MONDAY OF JULY, TWO  THOUSAND
THIRTEEN,  AT WHICH TIME THE MAXIMUM WEEKLY BENEFIT SHALL NOT EXCEED SIX
HUNDRED FIFTY DOLLARS UNTIL THE FIRST MONDAY OF JULY, TWO THOUSAND FOUR-
TEEN 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 SUBDIVISION. FOR PURPOSES OF THIS  SUBDIVI-
SION, THE TERM "STATE AVERAGE WEEKLY WAGE" SHALL MEAN THE AVERAGE WEEKLY
WAGE OF THE STATE OF NEW YORK FOR THE PREVIOUS CALENDAR YEAR AS REPORTED
BY  THE COMMISSIONER TO THE SUPERINTENDENT OF INSURANCE ON MARCH THIRTY-
FIRST.
  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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