New York Businesses Being Charged to Pay Back Federal Loans
A report by Anne McCloy of ABC 13 WHAM has revealed that New York businesses are receiving surcharges from the New York State Department of Labor to pay back federal loans the state took out to cover the unemployment benefits it had to pay during the Covid-19 pandemic.
The letter that some businesses have already received states "The Interest Assessment Surcharge (IAS), enacted by the New York State Legislature, assess a temporary charge to businesses to ensure the state has sufficient funds to pay the interest owed. While the IAS rate will vary from year to year, the current rate is .23%."
McCloy's report indicated that over 500,000 businesses in New York that pay unemployment insurance would receive a letter notifying them of the surcharge. Businesses must make the payment by the end of September, even though many haven't even received the letter which came as a shock to those that already have.
The Department of Labor website says most businesses will be charged $27.60 per employee. It also says that New York has paid only 11% back of the $9.2 billion it borrowed to cover the unemployment benefits during the pandemic and that businesses will be required to pay the surcharge annually until the entirety of the loan is paid off.
Eileen LaCorte, the President of LaCorte Companies Inc., said "I was kind of shocked. Basically we're paying back the federal government for the state's mishandling of the funds."
LaCorte also said "When I called, I said, 'Well it's more money than I anticipated,' and she said, 'Yeah, it's basically a surcharge on your amount because we borrowed from the federal government for unemployment payments and we have to pay them back."'
CBS 6 reported that they reached out to Governor Kathy Hochul to find out why the state didn't use federal relief money to cover part of the loan payments and take pressure off businesses, but did not receive a comment from her office.