N.Y. Labor Law § 502: Wage reporting - findings and policy

§ 502. Wage reporting - findings and policy. The legislature hereby

finds and declares that New York state is committed to developing the

most efficient and effective system possible for administering the

unemployment insurance system which, for more than a half century, has

provided financial support to workers who have lost their jobs through

no fault of their own.

Unlike all other states and territories, which administer their

unemployment insurance systems pursuant to a wage reporting system

whereby employers report employee wages on a regular basis, New York

maintains a wage request system. In order to acquire the enormous amount

of wage data necessary to calculate unemployment insurance benefits

using such a system, the department is required to send out hundreds of

thousands of wage requests to employers every year. These requests are

for information which, in large part, is submitted by employers on a

quarterly basis to the statewide wage reporting system administered by

the department of taxation and finance.

Given the size and complexity of the unemployment insurance system, an

increase in efficiency will necessarily result in significant

improvements in the services provided to benefit claimants and

employers. The improvements for benefit claimants that would result from

the implementation of a wage reporting system include more timely and

accurate entitlement and benefit rate determinations, a reduction in the

need to rely upon a claimant's own tax and wage statements and a

decrease in claimant overpayments which must be recovered at a later

date. As for employers, they would, for the large majority of benefit

claims filed, no longer be required to provide employee wage data upon

request, which would remove a significant employer burden as well as the

potential for a fifty dollar penalty each time a wage request is not

answered in a timely manner. Wage reporting would also reduce the number

of employers incorrectly charged for benefits.

Furthermore, the department is accountable under federal and state law

to measure the success of training, employment and reemployment

initiatives operated pursuant to such laws. The assessment of individual

performance is the best way to measure program quality and to develop

program improvements. Job placement, employment duration and earnings

are basic outcomes used to measure such performance. Information

surveys, traditionally used to collect such data, have proved to be both

expensive and unreliable because of low response rates and faulty recall

by those who respond. Using the statewide wage reporting system to track

such performance outcomes will avoid these problems and produce a

reliable system of accountability while placing no additional burdens on

employers.

Accordingly, for the above reasons, section one hundred seventy-one-a

of the tax law is amended to provide the department with complete access

to the wage reporting files maintained by the department of taxation and

finance as the first stage in a transition to an unemployment insurance

system based upon such wage reporting files, with the express

requirement that the department shall design and operate such system so

that an individual eligible for benefits under the current law would be

eligible for the same amount of benefits under a new system based upon

the wage reporting files. In addition, complete access to the wage

reporting files is granted for administration of the department's

employment security programs as well as for evaluation of the effect on

earnings of participation in training programs with respect to which the

department has reporting, monitoring or evaluating responsibilities.