The benefits from four major social insurance programs
provide crucial financial support during difficult times in the lives of
hundreds of thousands New York workers and their families each year, according
to a new report by
State Comptroller Thomas P. DiNapoli that reviews the benefit amounts, limits,
and wage replacement rate of these programs and how they compare with peer
states.
“New York’s
social insurance programs play a vital role in helping hundreds of thousands of
New Yorkers each year cope with the impact of losing a job, or being unable to
work due to their own or a family member’s injury or illness, pregnancy or the
arrival of a new child,” said DiNapoli. “We saw the importance of these
benefits in helping employees meet household needs during the pandemic, keeping
countless families from slipping into poverty.”
New York’s
four major social insurance programs are: unemployment insurance (UI), workers’
compensation insurance (WC), temporary disability insurance (TDI), and
paid family leave insurance (paid family leave). More than 138,000 New Yorkers
claimed unemployment benefits for the week of Oct. 5, 2024. In 2023, there were almost 170,000 claims
for workers’ compensation. In 2022, the most recent year for which data are
available, more than 163,000 paid family leave claims were paid.
Assessing the adequacy of benefits can be challenging, and
is influenced by the benefit rate, the maximum benefit or cap on benefits, and
the wages earned by workers claiming benefits. Adequacy is subjective, and
sufficiency may appear differently when assessed against wages lost or cost of
living, or in conjunction with household size, other household income and
savings, and the duration of benefit provided. In addition, benefit adequacy
must also be balanced with other policy goals, such as affordability of funding
the benefits and maintaining an incentive to return to work, among others.
DiNapoli’s report looks at how three types of workers –
those earning minimum wage, a living wage, and a six-figure salary – would fare
under New York’s programs, and
compares these results to those of peer states. It shows that New
York’s benefit rate for these programs are mostly
in-line with other participating states, and New York
is one of the only states that offers TDI and paid family leave.
Unemployment
Insurance
All 50 states provide this benefit, and New
York’s benefit rate of 50% is common. However, in
2024, the state’s maximum benefit of $504 is lower than in 29 other states. As
a result, the UI benefit replaces 42% of the weekly wage of a worker earning a
living wage in New York City. By
contrast, a worker earning the same wage would have 60% of income replaced in New
Jersey.
Under current law, increases to maximum benefits are being
phased in through October 2026, at which point they will equal 50% of the New
York State Average Weekly Wage. Four peer states offer higher replacement of
wages for workers earning a wage comparable to a New York
minimum wage: Pennsylvania, Texas,
Vermont, and New
Jersey. Only Florida
and California offer less for
workers earning a New York City
living wage.
As of Oct. 15, New York
continues to owe $6.2 billion to the federal government for UI benefits paid
during the pandemic, one of three states that continues to carry a balance. As
DiNapoli has previously reported,
federal and state taxes on employers have risen and federal taxes will continue
to rise until this balance is repaid. Employers will also continue to be
subject to an interest assessment surcharge. Since Sept. 30, 2021, $452.3 million has been paid in
interest assessment surcharges through Sept.
30, 2024.
Workers’ Compensation
New York’s
workers’ compensation benefit rate of 67% for temporary total disability is
mostly in line with other peer states, although its maximum benefit in 2024 is
lower than 29 states. For workers receiving the maximum benefit rate under
temporary total disability, New York’s
two-thirds benefit rate is in the range of most peer states, with only Texas,
New Jersey and Connecticut
providing higher rates. However, New York’s
$1,171 maximum benefit is lower than all peer states except New
Jersey.
Legislation enacted in 2023 will phase in increases to the
minimum benefit through 2026, after which it will be set at 20% of the New York
State Average Weekly Wage.
Temporary Disability
Insurance
Only five states offer TDI to employees for off-the-job
short-term illness or injury, which includes pregnancy. New
York’s $170 maximum weekly benefit ranks last, with
the benefit replacing 27% to 28% of the wages of a minimum wage employee in New
York. In comparison, wage replacement rates for
minimum wage and living wage workers range from 58% to 85% in the other states
that offer this benefit, including California
and New Jersey. No changes have
been made to the maximum benefit provided under this program since 1989.
Paid Family Leave
Only nine states and Washington,
D.C. provide paid family leave benefits in
2024. As of Jan. 1, 2024, New
York’s benefit rate is 67% of an employee’s average
weekly wage, ranking 8th among the few states that offer this benefit. The
amount is capped at a maximum benefit of $1,151, ranking 4th. DiNapoli’s report
found that Connecticut’s policy
is most beneficial to minimum wage workers, replacing 94% – 97% of income;
however, New York’s higher
maximum benefit makes its policy favorable for workers earning $100,000.
Click the text
highlighted in color below to access
Comptroller DiNapoli's Report posted on the Internet.
New
York’s Social Insurance Programs: Benchmarking Benefits
Reports addressing Unemployment Insurance in particular are
set out below. Click of the text highlighted in color below to access each of these reports posted on the Internet:
Unemployment
Insurance Trust Fund: Challenges Ahead
Update
on New York’s Unemployment Insurance Trust Fund: Challenges Continue