The New York State Department of Labor administers the state's unemployment benefit fund pursuant to the New York State Unemployment Insurance Law. Most employers are required to pay unemployment contributions for their employees. However, independent contractors, self-employed owners and owners of small businesses, excluding corporations, cannot pay unemployment taxes for their own unemployment insurance benefits. Although some states allow voluntary contribution, New York does not.
Overview of New York Unemployment Insurance Benefits
New York employers pay unemployment taxes to fund the unemployment insurance fund, and they cannot require their employees to contribute to their unemployment benefits.
New York unemployment benefits are available to workers terminated without fault and establish monetary eligibility. To receive unemployment benefits, employees must have worked in covered employment and received at least $1,600 in employment wages during a calendar quarter of employment in a base period. Eligible unemployed workers receive up to 26 weeks of standard benefits but may qualify for extended benefits if they exhaust their standard benefits.
Each unemployed worker receives up to 1/26 of weekly wages from their highest quarter of unemployment.
New York State Unemployment Insurance Law
According to the New York State Unemployment Insurance Law, independent contractors and small-business owners cannot voluntarily pay unemployment benefits to cover themselves. New York law allows corporate officers to pay unemployment benefits for themselves, and corporate officers may be able to receive unemployment benefits if their corporations pay unemployment taxes on their services. All corporate officers who perform services for their corporations are employees, according to the New York Unemployment Insurance Law.
Their compensation is taxable, and if majority owners or directors terminate their services, they may qualify for benefits.
Although unemployed business owners do not qualify for unemployment benefits if they become unemployed after starting their own companies, they may qualify for benefits if they start their own companies after first qualifying for unemployment benefits.
In other words, unemployed business owners may be able to receive unemployment benefits if they start their companies after suffering layoffs for previous employers. However, they may not qualify for unemployment benefits if they become unemployed after starting their own companies.
Self Employment Assistance Program
Unemployed workers who enroll in the Self Employment Assistance Program (SEAP) and begin their own companies qualify for unemployment benefits. SEAP is a joint federal-state program to help eligible unemployed claimants begin their own companies without losing their abilities to collect unemployment benefits. To participate in SEAP, the New York State Department of Labor must first determine a worker is likely to exhaust her unemployment benefits.
Definition of Employed
Unemployed workers cannot qualify for unemployment benefits without first enrolling in SEAP. Under New York law, the Department of Labor will not allow business owners and independent contractors to collect unemployment benefits even though they do not earn compensation. As long as an employee is working as a business owner, even without remuneration or profit, New York law considers him employed.
- New York State Department of Labor: Unemployment Insurance
- New York State Department of Labor: Self Employment Assistance Program
- New York State Department of Labor: Guidance for Self-Employed Individuals
- World Health Organization. "Rolling updates on coronavirus disease (COVID-19)." Accessed April 7, 2020.
- Congress.gov. "H.R. 748—CARES Act." Accessed April 7, 2020.
- United States Department of Labor. "UNEMPLOYMENT INSURANCE PROGRAM LETTER NO. 15-20." Accessed July 1, 2020.
- Whitehouse. "Memorandum on Authorizing the Other Needs Assistance Program for Major Disaster Declarations Related to Coronavirus Disease 2019." Accessed Sep. 8, 2020.
Jill Stimson has worked in various property management positions in Maryland and Delaware. Stimson worked for the top three property management companies in the commercial industry and focuses her career on property building logistics and tenant relationships. She holds a Juris Doctor and a Bachelor of Science in psychology.