According to the Society for Human Resources Management, U.S. employers added 209,000 new jobs in June, below economists’ expectations for the month, and unemployment rate fell to 3.6 percent.
In New York, New York employers have been receiving letters from the Unemployment Insurance Board which demand additional payments for the “IAS Surcharge.” As a reminder, the surcharge is intended to replenish the State’s UI fund, and make up for the fact that the New York State Department of Labor entirely depleted the UI fund by paying out so many benefits during the pandemic. (As we had written on other occasions, the State’s Comptroller found that the Department of Labor errors caused the State to pay out “an estimated billions of dollars” in UI benefits.) The State’s website explains the reasons for the IAS Surcharge that employers will have to pay this year, and potentially for many years to come:
“In March 2020, the federal government passed the CARES Act, creating several pandemic unemployment programs to support out-of-work Americans impacted by the COVID-19 pandemic. As New York State hit unemployment levels not seen since the Great Depression, the Department of Labor would go on to pay more than $105 billion dollars in unemployment and pandemic unemployment benefits between March 2020 and September 2021. As a result of this unexpected emergency, the Unemployment Insurance (UI) Trust Fund was depleted. Like dozens of states around the country, New York State borrowed funds from the federal government to maintain UI and pandemic benefits while the pandemic programs were in effect.
During periods in which there is an outstanding federal loan, New York State law requires contributing employers to pay an annual Interest Assessment Surcharge, or IAS. Beginning in June 2023, employers who make unemployment insurance contributions will be notified of the 2023 IAS amount due. Payment of the IAS is due within 30 days of the date of this notice. Unless the Federal government chooses to abate all or part of the interest incurred or the principal balance amount is repaid with no more interest accrued, businesses will be required to make annual IAS payments until all interest has been fully paid off.”