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STATE UNEMPLOYMENT INSURANCE REFORMS TO AID BUSINESSES

Major reforms in state unemployment insurance that take effect this year will make New York more business-friendly, state Labor Department officials said Thursday.

Dozens of changes are being implemented that are designed to reduce red tape, make rates more equitable for businesses that have had few layoffs and make it tougher for claimants to take unfair advantage of the system.

Some of the changes went into effect Jan. 1 while others will be implemented April 1.

About 40 local business owners and managers attended a forum Thursday at the Buffalo Niagara Partnership where state officials outlined the complicated reforms that were passed in the last legislative session.

One of the participants in the seminar said it's important for the state to continue to become more business-friendly.

Kurt F. Hoctor is president of Roy Track Co. Inc., a Ganson Street business that constructs and repairs industrial railroad sidings.

"The costs of some state regulations make it difficult for businesses to stay competitive," said Hoctor. "Some of the state laws seem to give with one hand and take away with the other."

Revamping the state's unemployment insurance system has been a major goal of business groups for several years, according to Elizabeth M. Pujolas, the Partnership's director of government relations.

"We've been looking for fairness. If a company doesn't have a lot of (unemployment) claims filed against it, it shouldn't be putting a lot of money into the fund. These changes will help to reduce the costs of the doing business in New York," Ms. Pujolas said.

The centerpiece of the reform legislation is a provision called "tax-rate equity."

Effective Jan. 1, the tax tables were revised to place a greater burden on employers that have poor records when it comes to terminations or layoffs.

Richard H. Foley, district supervisor of the Unemployment Insurance Division, said the range of tax-rate tables has been expanded, providing for normal tax rates ranging from 0 percent to 8.5 percent. The old regulations set a maximum normal rate of 5.4 percent.

"It was felt that employers with good experience were bearing an unequal share of the costs brought on by employers who used the system to significant levels," Foley said. "The experience rating system needed to be fixed."

Ms. Pujolas said some construction firms have expressed reservations about the changes. The construction industry is more prone to layoffs and some business owners are concerned that the reforms will place an unfair burden on sectors that experience seasonal fluctuations in employment.

The taxable wage base has also been raised to $8,500 from $7,000. Foley said the wage base had not been increased since 1983.

In an effort to help furloughed workers find new jobs faster, the state has created a new "reemployment service" that will be funded through a new tax of .75 of 1 percent of an employer's taxable payroll. The state is expanding its effort to help claimants with job-hunting skills, including writing resumes.

"The goal is to shorten the duration of time that many people receive unemployment benefits and get them back to work," Foley said.

Claimants can receive unemployment benefits of up to $365 a week for a maximum of 26 weeks a year. David P. Walker, the manager of the local hearing office for the state Unemployment Insurance division, hopes that intensified efforts to put people back to work will help to address a long-standing concern.

"When you look at all the states, New York has a higher percentage of people who draw unemployment for the maximum period," he said.

Walker also noted that effective April 1, the state will move to a wage reporting system to determine unemployment insurance eligibility and benefits. The current system has created paperwork burdens for many companies by requiring them to fill out forms and verify information when former employees file claims. Failure to meet state deadlines subjects companies to fines.

Under the new system, the Unemployment Insurance Division will use computerized wage information already available from the Department of Taxation and Finance to verify wages.

"New York is the only state in the nation that hasn't been using a wage reporting system to determine eligibility and benefits," Walker said.

Ms. Pujolas said Thursday's forum aimed to boost awareness.

"We've found that so many companies don't know about all the changes that are occurring this year -- changes that will have a major impact on their businesses," she said.

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