As you may recall, the state of New York was forced to borrow funds from the federal government to cover unemployment benefits. Interest began accruing on these funds in September of 2021 and must be repaid to the federal government. New York Unemployment Insurance Law provides for an Interest Assessment Surcharge (IAS) to be paid by covered employers any time the state has to pay interest on its federal loans. Section 581-d of the New York Unemployment Insurance Code states that:
Each employer that is liable for contributions under this article shall pay an assessment to the commissioner at a rate established annually by the commissioner sufficient to pay interest due on advances from the federal unemployment account under Title XII of the Social Security Act (42 U.S. Sections 1321 to 1324) during any period that such interest will accrue.
IAS notices were mailed to employers in July. However, we have been advised that approximately 40% of all New York employers have not yet made their Interest Assessment Surcharge payment. The New York State Department of Labor (NYSDOL) is encouraging all employers to make their payment as soon as possible in preparation for the interest due to the federal government on September 30, 2022.
Please note that New York employers face a possible FUTA credit reduction of 0.30% for 2022. We will pass along updates regarding the FUTA credit reduction as more information becomes available.
