Legislative Alert: May 5, 2025
PRESIDENT'S MESSAGE
The Governor and Legislature Agree to
Major Unemployment Improvements in the NYS Budget
The agreement is a critical step toward supporting unemployed workers struggling to make ends meet while providing relief to employers. We commend Governor Hochul, Senate Majority Leader Stewart-Cousins, and Speaker Heastie for recognizing the urgency of substantially raising benefits to a level that will allow workers to better support themselves and their families while they are out of work.
Pursuant to existing statute, weekly unemployment benefits are set at 50% of a worker’s weekly wage, capped at a percentage of the state’s average weekly wage (AWW). That maximum benefit cap was scheduled to increase annually until it reached 50% of AWW in 2025.
However, because federal law prohibits benefit increases while the unemployment trust fund is in a deficit, New York’s maximum benefit has been frozen at $504 per week since 2019. Without a freeze, the current benefit would be $869 per week.
Eliminating the Trust Fund Deficit
The 2025 state budget agreement increases the maximum benefit for workers and eliminates the trust fund deficit by allowing the state to use up to $8 billion in rainy-day funds to return the fund to solvency. Much of the rainy-day fund came from federal pandemic assistance. Over 30 other states also used pandemic assistance to keep their funds solvent.
On October 1, 2025, the maximum weekly benefit will increase from $504 to $869. It will remain indexed at 50% of the state's AWW each year thereafter.
Effect on Employers
When the unemployment fund initially becomes insolvent, states get two years of interest-free federal loans to pay benefits. After that, the federal share of unemployment costs for employers increases to pay the interest on the loans and pay down the debt. At five years, those costs increase.
Employers are now paying approximately $200 more per employee due to increased federal costs and interest on loans that the fund needs to pay benefits. If the deficit remains in place, that number would go up to at least $250 later this year. If there is a recession, that amount would increase further, while benefits would remain frozen.
The budget agreement will eliminate the increased federal costs for employers by paying down the debt immediately. The agreement also resets the clock for access to two years of interest-free loans if the state faces a recession, economic downturn, or other event that returns the fund to a deficit.
Access for Striking Workers
The 2025 state budget agreement provides workers on strike earlier access to benefits. New York is one of only two states where workers on strike can collect unemployment benefits. However, workers on strike now must wait three weeks before becoming eligible for benefits, while other unemployed workers have only a one-week waiting period. This disparity penalizes workers for exercising their collective bargaining rights. The budget agreement reduces the delay for workers on strike to by one week. Now, workers on strike will wait a total of two weeks instead of three. These changes will go into effect on October 1, 2025.
Mario Cilento, President
UPCOMING MEETING
LABOR LOBBYISTS MEETING
Monday, May 12, 2025, 1:00 p.m.
This event will be located at the Albany office of the NYS AFL-CIO,
100 South Swan St. Albany, NY.
Assemblymember Stacey Pheffer Amato, Chair of the Governmental Employees Committee will be the guest speaker.
This meeting is for labor representatives only.