ALBANY, N.Y. — New York Gov. Andrew Cuomo has announced that the 2015 unemployment insurance interest-assessment surcharge (IAS) will decrease to its lowest level in five years.
The state is phasing out the surcharge by 2016, Cuomo’s office said in a news release Monday.
New York state in 2015 will assess the average business less than one dollar per employee, or 93 cents.
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In addition, the state won’t even send an IAS to more than 123,000 employers that have an amount due of less than $1, Cuomo’s office said.
The state cites reforms in unemployment insurance and “improved economic conditions” in the positive balance in the unemployment-insurance trust fund for the first time since 2009. The same factors have resulted in an IAS rate that has dropped from $21.25 per employee in 2011 to just 93 cents per employee for 2015, Cuomo’s office said.
“The sharp reduction and eventual elimination of this fee on businesses shows the strength of New York’s rebounding private sector and the effectiveness of this administration’s efforts to grow this state’s economy and reform the unemployment-insurance trust fund,” Cuomo contended in the news release.
For seven years, New York’s unemployment-insurance trust fund did not have enough money to pay for claims that unemployed workers had filed, Cuomo’s office explained.
As a result, the situation forced New York to borrow funds from the federal government to cover the difference and, as the law requires, the state assessed employers a temporary IAS to pay the interest on the $3.5 billion debt.
In March 2013, Cuomo signed into law a “major reform” of the state’s unemployment-insurance system, his office said.
The law included a mechanism to pay back the federal loan faster and add “fund stability” and, therefore, “predictability” for employers, according to Cuomo’s office.
Much like paying off the balance of a credit card early to avoid escalating interest costs, authors designed the reform law to repay the trust-fund loan sooner, saving New York businesses an estimated figure of more than $200 million in interest.
“This rate reduction is welcome news for New York’s businesses, who can look forward to another year of continued assessment relief,” Mario Musolino, acting state Labor Commissioner, said in the governor’s news release.
Contact Reinhardt at ereinhardt@cnybj.com
