February 04, 2021

2-4-2021 Significant Changes to the Unemployment Law Impacting Employers

Modification of the Experience Rating System

The New York State Department of Labor (DOL) recently issued an Order temporarily modifying the unemployment experience rating system in order to eliminate charges incurred during the COVID-19 pandemic. The Order provides that an employer's account will not be charged for the duration of a claim for benefits paid to a claimant from March 9, 2020 forward. Instead, these charges will be directed to the State's general unemployment account.

So, what does this mean for employers? Essentially, this means that employers’ experience ratings will not be impacted by the influx of unemployment claims many have experienced because of the pandemic. However, the Order does not make clear whether employers will still have to pay some portion of unemployment insurance taxes.

The provisions of the Order apply to 100% of benefits attributable to employers liable for contributions and to 50% of benefits attributable to employers liable for payments in lieu of contributions (i.e., self-insured employers). The Coronavirus Aid, Relief, and Economic Security Act (CARES Act) previously provided 50% relief to self-insured nonprofits, government agencies, and Native American tribes for unemployment charges incurred between March 13, 2020 and Dec. 31, 2020. This Order provides these employers with reimbursement for the other 50% of the charges they incurred over that period and confirms that these charges will also be directed to the general account until further notice.

While the Department of Labor has not advised as to the method of reimbursement it will provide these groups for the retroactive relief provided under this Order, it may be in the form of a credit against future unemployment insurance benefit charges. In either case, employers will ultimately receive complete relief for the unemployment charges incurred from March 9, 2020 until the rescission of this Order.

Employers should continue to be diligent in their review of charges, invoices, and statements from the Department of Labor. As many employers previously experienced when the original CARES Act credit arose, the statements issued by the Department of Labor continued to indicate full charges for several months and did not account for the credit. Employers should contact counsel to review the amounts to be paid before corresponding with the Department of Labor.

A copy of the Commissioner's Order can be found at:


Partial Unemployment Insurance

The Department of Labor also recently initiated a partial-unemployment pilot program whereby the eligibility determination for claimants who work part-time has changed. The Department of Labor is now using an "hours" based approach in lieu of the former "days of work" approach. Under the new rule, if an employee is working 30 hours or fewer a week and making $504 or less per week, the following guidelines apply when reporting such part-time work (rounded up to the nearest hour):

  • 4 or fewer hours of work = 0 days worked: No reduction in weekly benefit rate
  • 5 – 10 hours of work = 1 day worked: 75% of weekly benefit rate
  • 11 – 20 hours of work = 2 days worked: 50% of weekly benefit rate
  • 21 – 30 hours of work = 3 days worked: 25% of weekly benefit rate
  • 31+ hours of work = 4 days worked: 0% of weekly benefit rate

Employers are encouraged to familiarize themselves with the new pilot program as it is widely anticipated that the New York State Legislature will soon pass legislation formalizing the rule and amending the unemployment insurance law permanently.

Please reach out to a member of our Labor & Employment Practice Group with questions.