As part of the FY 2026 budget, New York State has paid off nearly $7 billion in federal Unemployment Insurance (UI) Trust Fund debt, paving the way for significant UI benefit increases and long-term cost savings for employers. Beginning October 2025, the state’s maximum weekly UI benefit will increase from $504 to $869, the first such increase in over a decade.
Key Impacts for Employers
- Higher Weekly Benefits. Eligible unemployed workers will soon receive up to $869 per week, strengthening New York’s unemployment safety net.
- UI Trust Fund Solvency Restored. With the debt repaid, the fund is now solvent, freeing employers from years of added federal interest assessments.
- Reduced Employer Costs. UI contribution rates are expected to drop, generating average savings of $100 per employee in 2026, increasing to $250 per employee in 2027.
HR Works will continue monitoring this topic and provide additional information as it becomes available.
