BILL NUMBER: S7173

SPONSOR: COONEY
 
TITLE OF BILL:

An act to amend the labor law, in relation to wage reporting in the
unemployment insurance law

 
PURPOSE:

To direct the Department of Labor to utilize current income and employ-
ment verification services to cut down on unemployment insurance fraud
and improper payments

 
SUMMARY OF PROVISIONS:

Section 1. Authorizes the department to contract with a third-party
provider to receive current income and employment verification services
for use in eligibility and redeterminations.

§ 2. This act shall take effect immediately.

              

 
JUSTIFICATION:

Section 502 of the Labor law currently allows the Department of Labor to
have complete access of wage reporting files maintained by the Depart-
ment of Taxation Finance. This data includes quarterly wage data filed
by employers in the state. While helpful, this data is often stale when
an individual goes to apply for unemployment benefits. This creates
opportunity in the system for improper payments and fraud to be perpe-
trated.

In November of 2022, the State Comptroller released an audit of the
controls and management of the unemployment system, alleging $11B in
fraud. This included estimates of a 10.34% improper payment rate and
4.51% fraud for SFY19-20, as well as a 28.89% improper payment rate and
17.79% fraud rate for SFY21-22. While the Department of Labor countered
that their own fraud estimate was $4B - this still demonstrates that
this is a significant problem that needs to be addressed. New York busi-
nesses are the ones paying the price - and need relief.

Opportunities currently exist for the state to seek federal funds
through the American Rescue Plan Act (ARPA) to pay for tools and
services that address unemployment insurance fraud, improper payment and
overpayment based on a recent report from the U.S. Department of Labor.
However, time is of the essence, as requests for funding need to be made
this July. New York should not waste this opportunity to improve our
unemployment insurance systems with data that is not collected on a
quarterly basis, but rather potentially current as of the last pay peri-
od.

 
LEGISLATIVE HISTORY:

New Bill

 
FISCAL IMPLICATIONS:

To be determined.

 
EFFECTIVE DATE:
This act shall take effect immediately.