New York’s $7.7 billion pandemic-era federal unemployment insurance loan is coming due next month, and employers will foot the bill despite the state’s plea to Washington to waive the debt.
Private businesses in the state have until Sept. 30 to pay approximately $27.60 per employee to reimburse the federal government for interest accrued on the state’s loan—the first of many payments that could continue for more than a decade. That’s in addition to the regular state unemployment insurance tax, a levy that automatically increases when the fund is low.
New York employers say the extra burden will cause them to slow growth and hiring. It’s a pandemic side effect that could add to the cost of doing business for years to come and expand the challenges companies face while dealing with post-pandemic inflation and supply chain limitations.
For many employers, unemployment insurance costs will rise by thousands of dollars annually, said Ashley Ranslow, New York State Director for the National Federation of independent Business, which represents 11,000 small businesses in the state. Businesses on average are paying about $200 more per employee annually, she said.
“You’re pushing businesses to either have to cut back on labor, or hold back on hiring, or increase prices, or a combination of the three,” she said.
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