senate Bill S36A

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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actions

  • 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:S36A

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 $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--A

                       2013-2014 Regular Sessions

                            I N  S E N A T E

                               (PREFILED)

                             January 9, 2013
                               ___________

Introduced by Sens. PERALTA, ADDABBO, AVELLA, SQUADRON -- 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 section 1 of part O of chapter  57  of  the  laws  of
2013, 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  dollars have been paid to such employee by such
employer with respect to employment during  any  calendar  year,  except
that  such  term does not include remuneration paid to an employee by an
employer with respect to employment during any calendar  year  beginning
with the first day of
                                        that exceeds
             January 2014                  $10,300
             January 2015                  [$10,500] $12,500
             January 2016                  [$10,700] $13,500
             [January 2017                 $10,900
             January 2018                  $11,100
             January 2019                  $11,400
             January 2020                  $11,600
             January 2021                  $11,800
             January 2022                  $12,000
             January 2023                  $12,300

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD00719-03-4

S. 36--A                            2

             January 2024                  $12,500
             January 2025                  $12,800
             January 2026                  $13,000
and  each  year  thereafter  on  the  first  day of January that exceeds
sixteen percent of the state's average annual wage as determined by  the
commissioner  on  an annual basis pursuant to section five hundred twen-
ty-nine of this article; provided, however,  that  in  calculating  such
maximum amount of remuneration, the amount arrived at by multiplying the
state's average annual wage times sixteen percent shall be rounded up to
the  nearest hundred dollars. In no event shall the state's annual aver-
age wage be reduced from the amount determined in the previous year]
  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.
  S  2.  Paragraph (a) of subdivision 5 of section 590 of the labor law,
as amended by section 8 of part O of chapter 57 of the laws of 2013,  is
amended to read as follows:
  (a)  A  claimant's  weekly benefit amount shall be one twenty-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, provided the claimant has remuneration
paid in all four calendar quarters during his  or  her  base  period  or
alternate  base  period.  However, for any claimant who has remuneration
paid in all four calendar quarters during his  or  her  base  period  or
alternate  base  period  and  whose  high  calendar quarter remuneration
during the base period  is  three  thousand  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  contrib-
utions  under  this  article.  A  claimant's weekly benefit shall be one
twenty-sixth of the average remuneration paid in the two  highest  quar-
ters  paid  during the base period or alternate base period by employers
liable for contributions or payments in lieu of contributions under this
article when the claimant has remuneration paid in two or three calendar
quarters provided however, that a claimant whose high  calendar  quarter
is  four  thousand  dollars or less but greater than three thousand five
hundred seventy-five dollars shall have a weekly benefit amount  of  one
twenty-sixth  of  such  high calendar quarter. However, for any claimant
who has remuneration paid in two or three calendar quarters  during  his
or  her  base  period  or  alternate base period and whose high calendar
quarter remuneration during the  base  period  is  three  thousand  five
hundred  seventy-five  dollars  or less, the benefit amount shall be one
twenty-fifth of the remuneration paid during the highest calendar  quar-
ter 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 bene-
fit 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

S. 36--A                            3

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 and after the first Monday of  [October]  JULY,
two  thousand  fourteen,  the  weekly benefit shall not be less than one
hundred dollars, nor shall it exceed four hundred [twenty]  SEVENTY-FIVE
dollars  until  the first Monday of [October] JULY, two thousand fifteen
when the maximum benefit amount shall be [four] FIVE hundred twenty-five
dollars, until the first Monday of [October] JULY, two thousand  sixteen
when  the  maximum  benefit  amount shall be [four] SIX hundred [thirty]
dollars, until the first Monday of [October] JULY, two  thousand  seven-
teen  when the maximum benefit amount shall be [four] SIX hundred [thir-
ty-five] FIFTY dollars, until the first Monday of  [October]  JULY,  two
thousand eighteen when the maximum benefit amount shall [be four hundred
fifty  dollars, until the first Monday of October, two thousand nineteen
when the maximum benefit amount shall be thirty-six percent of the aver-
age weekly wage until the first Monday of October, two  thousand  twenty
when  the  maximum  benefit  amount shall be thirty-eight percent of the
average weekly wage, until the first  Monday  of  October  two  thousand
twenty-one when the maximum benefit amount shall be forty percent of the
average  weekly  wage,  until  the first Monday of October, two thousand
twenty-two when the maximum benefit amount shall be forty-two percent of
the average weekly wage, until the first Monday of October, two thousand
twenty-three when the maximum benefit amount shall be forty-four percent
of the average weekly wage, until the first Monday of October, two thou-
sand twenty-four when the maximum  benefit  amount  shall  be  forty-six
percent  of  the average weekly wage, until the first Monday of October,
two thousand twenty-five  when  the  maximum  benefit  amount  shall  be
forty-eight  percent  of the average weekly wage, until the first Monday
of October, two thousand twenty-six and  each  year  thereafter  on  the
first  Monday  of October when the maximum benefit amount shall be fifty
percent of the average weekly wage provided, however, that in  no  event
shall  the  maximum  benefit  amount  be reduced from the previous year]
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 SUBDIVISION. FOR PURPOSES OF THIS SUBDIVI-
SION, 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 THIR-
TY-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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