Photo: KLH49 / E+ / Getty Images
New York State is raising its unemployment insurance benefits for the first time in years as part of Governor Kathy Hochul's final budget agreement with the state legislature. The move aims to pay off over six billion dollars of unemployment insurance debt. Weekly unemployment benefits, which have been capped at $504 since 2019, will now increase to a maximum of $869 starting in October 2025. Governor Hochul announced that this change is part of efforts to provide long-overdue relief to workers and businesses in New York.
The state used $8 billion from its reserves to eliminate the unemployment insurance debt, a move that will also cut costs for businesses. By paying off the debt, the state avoids additional taxes on businesses that were implemented to repay the federal loans taken during the pandemic. Employers are projected to save an average of $100 per employee in 2026 and $250 in 2027. The taxable wage base will increase, strengthening the trust fund over time and maintaining affordable tax rates for employers.
Governor Hochul stated, "By paying off this unprecedented Unemployment Insurance Trust Fund debt, we are delivering long-overdue relief to New York’s workers and businesses." The budget agreement also reduces the waiting period for striking workers to access benefits from three weeks to two, enhancing support for workers exercising their collective bargaining rights.
Assembly Labor Committee Chair Harry Bronson called the budget agreement a "huge victory" for both employers and workers, as it increases benefits and eliminates additional taxes. However, some economists warn that the adjustments to the financing structure are minor and do not fully address the system's insolvency.
The New York State AFL-CIO praised the increase in benefits, stating it will make a tangible difference for unemployed workers and provide relief to employers. The changes are set to take effect on October 1, 2025.