NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A4015
SPONSOR: Morelle (MS) TITLE OF BILL: An act to amend the labor law, in relation to the
elimination of employer unemployment contributions for employees fired
for misconduct
PURPOSE: To eliminate instances when an employer fires an employee for
misconduct and is subsequently required to contribute to that employee's
unemployment benefit.
SUMMARY:
Section 1 adds clause (vi) to subparagraph 2 of paragraph (e) of subdi-
vision 1 of section 581 of the labor law to exclude employers who termi-
nate as a result of misconduct or good cause from the experience rating.
Section 2 adds a new subdivision (2-a) to section 581 of the labor law
to exclude employers who terminate as a result of misconduct or good
cause.
Section 3 adds a new section (594-a) to the, labor law to ensure a
claimant who has been fired for misconduct or good cause within their
base period sees a reduction in benefits that correlates with that
employment period.
Section 4 amends subdivision 3 of section 593 of the labor law to ensure
the claimant who was fired for misconduct does not collect based from
the general account in the event he/she has been fired for misconduct or
good cause.
Section 5 adds a new section (593-a) of the labor law for misconduct
hearings and determinations. Under this new section, an employer will
have ten days to object to a claim and the Department has thirty days to
have a final determination hearing.
Section 6 provides the enacting clause.
JUSTIFICATION: Under Section 593.3 of the labor law, if an unemploy-
ment claimant lost employment prior to the filing of her/his claim
through misconduct in connection with his/her employment, she/he is
disqualified from benefits beginning with such loss of employment and
ending when he/she has worked in subsequent employment and earned remun-
eration at least equal to five times her/his weekly benefit rate. Any
wages earned through employment which ended due to misconduct in
connection with that employment cannot be used to establish a valid
original claim for benefits.
However, if that claimant obtains a new position and is let go in a
non-disqualifying way, she/he may be eligible to collect benefits. In
that instance, the original terminating employer is charged a debit in
accordance with section 581 of the labor law.
The need for clarification in the law was recently highlighted in two
decisions made by the Appellate Division in the 3rd Judicial Department.
In the Matter of Perry (Summit Security Systems Inc.) and Matter of
Christy (Aspire of Western NY), Judge Peters explains the necessity of a
"final determination" of misconduct being made by the Department on the
claimant's prior termination in order to exclude the employer from an
experience rating charge to their account. Likewise, the court decided
the same determination should be made in order to exclude wages earned
from employers from whom the claimant lost employment under conditions
which would be disqualifying.
This bill amends the labor law so that in instances where the claimant
has been denied unemployment benefits due to termination for misconduct,
the terminating employer will have an opportunity to object and be
excluded from the base period of employers used in calculating a valid
original claim and therefore not be charged a debit on the claim of the
terminated claimant.
With genuine unemployment claims increasing, it is especially important
to create policies that protect businesses from illegitimate and unde-
served claims.
LEGISLATIVE HISTORY: A2633 of 2013: referred to Labor Committee.
FISCAL IMPLICATIONS: Significant cost savings are anticipated for
businesses as well as the State and Federal governments.
EFFECTIVE DATE: This act shall take effect immediately.
