A business lobbying group's campaign urging companies to prepay some of next year's unemployment insurance premiums has been a success, the group's president said.
Employers will get a $420 million break on state unemployment insurance costs next year, said Daniel Walsh, president of the Business Council of New York State.
Over the past three weeks, the Council convinced enough businesses to take advantage of a legal quirk that gives employers a tax break by prepaying their unemployment taxes for the first quarter of next year before the end of the month, Walsh said.
The initiative will give businesses a reduction of $63 per employee on their 1998 unemployment tax bills. Gov. George Pataki said that 75 percent of the businesses in New York will see reductions of more than that.
The council received commitments from over 1,000 companies representing 1 million employees. Those payments exceeded the $130 million needed to bring the state's Unemployment Insurance Trust Fund to $930 million and enact the cuts, Walsh said.
The fund grew from about $450 million to more than $800 million in the past year. That put the Business Council in range so its prepayment push would work, according to the governor's aides. Unemployment insurance tax rates automatically go down when the fund is at or above 2 percent of the aggregate taxable wage base.