senate Bill S36

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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  • 09 / Jan / 2013
    • REFERRED TO LABOR
  • 08 / Jan / 2014
    • REFERRED TO LABOR
  • 23 / Jan / 2014
    • AMEND AND RECOMMIT TO LABOR
  • 23 / Jan / 2014
    • PRINT NUMBER 36A

Summary

Relates to increasing the maximum benefit rate for unemployment insurance.

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Bill Details

Versions:
S36
S36A
Legislative Cycle:
2013-2014
Current Committee:
Senate Labor
Law Section:
Labor Law
Laws Affected:
Amd ยงยง518 & 590, Lab L
Versions Introduced in Previous Legislative Cycles:
2011-2012: S673A
2009-2010: S2245B
2007-2008: S8742

Sponsor Memo

BILL NUMBER:S36

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 2014, 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 2013, to $525 as of July 2014, to $600 as of July 2015, to
$650 as of July 2016, 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. 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 two years ago.

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:
2011-12: S.673-A
2010: S.2245-B Advanced to 3rd Reading
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
________________________________________________________________________

                                   36

                       2013-2014 Regular Sessions

                            I N  S E N A T E

                               (PREFILED)

                             January 9, 2013
                               ___________

Introduced  by  Sen. PERALTA -- read twice and ordered printed, and when
  printed to be committed to the Committee on Labor

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  FIFTEEN,  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  SIXTEEN,
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  SEVENTEEN.  IN  EACH
SUCCEEDING CALENDAR YEAR, THE DEPARTMENT SHALL CALCULATE THE BASE AMOUNT
OF  REMUNERATION  NECESSARY  FROM WHICH TO PRODUCE SUFFICIENT PREMIUM TO
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.

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD00719-01-3

S. 36                               2

  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  FOURTEEN,  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 FIFTEEN AT WHICH TIME  THE  WEEKLY  BENEFIT
SHALL  NOT  EXCEED  FIVE  HUNDRED  TWENTY-FIVE  DOLLARS, UNTIL THE FIRST
MONDAY OF JULY, TWO THOUSAND SIXTEEN AT WHICH TIME  THE  MAXIMUM  WEEKLY
BENEFIT  SHALL  NOT EXCEED SIX HUNDRED DOLLARS UNTIL THE FIRST MONDAY OF
JULY, TWO THOUSAND SEVENTEEN, AT WHICH TIME THE MAXIMUM  WEEKLY  BENEFIT
SHALL  NOT  EXCEED  SIX  HUNDRED FIFTY DOLLARS UNTIL THE FIRST MONDAY OF
JULY, TWO THOUSAND EIGHTEEN 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 EIGHTEEN AND NOT LATER THAN AUGUST FIRST, TWO THOUSAND EIGHTEEN
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. FOR PURPOSES OF THIS SUBDIVISION, THE TERM "STATE  AVERAGE  WEEKLY
WAGE"  SHALL  MEAN THE AVERAGE WEEKLY WAGE OF THE STATE FOR THE PREVIOUS
CALENDAR YEAR AS REPORTED BY THE COMMISSIONER TO THE  SUPERINTENDENT  OF
FINANCIAL SERVICES 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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