Unemployment liability question

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Joined: Sun Nov 15, 2009 9:02 am
Location: New York

Unemployment liability question

Post by jon-nyc »

Not sure if anyone here knows the answer to this, which could vary by state anyway, but I thought I'd post it all the same.

My wife and I have a nanny that we pay above the table, which means we pay unemployment insurance. It recently occurred to us that at some point as our son grows up we will let her go, at which time she will be eligible for unemployment benefits.

We understand that the state pays the benefits, but deducts them from 'our account' which contains the payments we've made over time minus any benefits that have been claimed. In the event that our nanny, upon her eventual dismissal, receives the full compliment of 26 weeks of benefits (or more if there is an extension in place), our account would go substantially into negative territory.

If that happens, will the state ever bill us directly for the balance?

Most of the documentation I've seen online indicates that a negative balance is compensated for by paying a higher UI rate in the future - but in practice we would never have to do that since we would be done having employees at that point. But we're wondering if, after some time with no UI payments to address the shortcoming, if we might just get billed.

In doing some internet research, I found one reasonably credible sounding post in another forum that said it could happen in NY, though there's nothing I've found in the NYS Dept of Labor literature about it - yet.

I've emailed the DOL about this, but don't expect a coherent answer without at least a few back-and-forths and a phone call or two. So in the mean time I thought I'd post here.
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Re: Unemployment liability question

Post by wwross »

I thought that you, as an employer were not personally liable for unemployment insurance payouts. I thought that was why they call it insurance. You (and indirectly) your employee have paid the "premium" for the instance that they are fired, laid off. You pool your premiums with all other employers to cover the unemployment risk of some of the employers.

Maybe I am missing something.
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