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Small businesses outraged by additional fee to offset pandemic unemployment debt

  • / Updated:
  • Staff Report 

New York small businesses are being hit with an annual “Interest Assessment Surcharge” as the state aims to repay billions in unemployment insurance debt accrued during the COVID-19 pandemic.

DiSanto Propane (Billboard)

The additional fee, which was first implemented last year, is drawing criticism from business owners who argue it exacerbates the financial strain caused by pandemic shutdowns. The state currently owes the federal government $6.5 billion in unemployment insurance costs.

Opposition to the surcharge is mounting, with organizations like the National Federation of Independent Business (NFIB) urging Governor Kathy Hochul to use federal pandemic relief funds to settle the debt. The state’s business environment, already perceived as challenging, is further strained as New York has not allocated any of its federal COVID relief funds towards the unemployment insurance debt. The state comptroller’s 2022 audit highlighted an $11 billion loss to unemployment insurance fraud, adding to the calls for alternative solutions to recoup the deficit without burdening small businesses.