The benefits from four major social insurance programs provide crucial financial support during difficult times in the lives of hundreds of thousands New York workers and their families each year, according to a new report by State Comptroller Thomas P. DiNapoli that reviews the benefit amounts, limits, and wage replacement rate of these programs and how they compare with peer states.
“New York’s social insurance programs play a vital role in helping hundreds of thousands of New Yorkers each year cope with the impact of losing a job, or being unable to work due to their own or a family member’s injury or illness, pregnancy or the arrival of a new child,” said DiNapoli. “We saw the importance of these benefits in helping employees meet household needs during the pandemic, keeping countless families from slipping into poverty.”
New York’s four major social insurance programs are: unemployment insurance (UI), workers’ compensation insurance (WC), temporary disability insurance (TDI), and paid family leave insurance (paid family leave). More than 138,000 New Yorkers claimed unemployment benefits for the week of Oct. 5, 2024. In 2023, there were almost 170,000 claims for workers’ compensation. In 2022, the most recent year for which data are available, more than 163,000 paid family leave claims were paid.
Assessing the adequacy of benefits can be challenging, and is influenced by the benefit rate, the maximum benefit or cap on benefits, and the wages earned by workers claiming benefits. Adequacy is subjective, and sufficiency may appear differently when assessed against wages lost or cost of living, or in conjunction with household size, other household income and savings, and the duration of benefit provided. In addition, benefit adequacy must also be balanced with other policy goals, such as affordability of funding the benefits and maintaining an incentive to return to work, among others.
DiNapoli’s report looks at how three types of workers – those earning minimum wage, a living wage, and a six-figure salary – would fare under New York’s programs, and compares these results to those of peer states. It shows that New York’s benefit rate for these programs are mostly in-line with other participating states, and New York is one of the only states that offers TDI and paid family leave.
Unemployment Insurance
All 50 states provide this benefit, and New York’s benefit rate of 50% is common. However, in 2024, the state’s maximum benefit of $504 is lower than in 29 other states. As a result, the UI benefit replaces 42% of the weekly wage of a worker earning a living wage in New York City. By contrast, a worker earning the same wage would have 60% of income replaced in New Jersey.
Under current law, increases to maximum benefits are being phased in through October 2026, at which point they will equal 50% of the New York State Average Weekly Wage. Four peer states offer higher replacement of wages for workers earning a wage comparable to a New York minimum wage: Pennsylvania, Texas, Vermont, and New Jersey. Only Florida and California offer less for workers earning a New York City living wage.
As of Oct. 15, New York continues to owe $6.2 billion to the federal government for UI benefits paid during the pandemic, one of three states that continues to carry a balance. As DiNapoli has previously reported, federal and state taxes on employers have risen and federal taxes will continue to rise until this balance is repaid. Employers will also continue to be subject to an interest assessment surcharge. Since Sept. 30, 2021, $452.3 million has been paid in interest assessment surcharges through Sept. 30, 2024.
Workers’ Compensation
New York’s workers’ compensation benefit rate of 67% for temporary total disability is mostly in line with other peer states, although its maximum benefit in 2024 is lower than 29 states. For workers receiving the maximum benefit rate under temporary total disability, New York’s two-thirds benefit rate is in the range of most peer states, with only Texas, New Jersey and Connecticut providing higher rates. However, New York’s $1,171 maximum benefit is lower than all peer states except New Jersey.
Legislation enacted in 2023 will phase in increases to the minimum benefit through 2026, after which it will be set at 20% of the New York State Average Weekly Wage.
Temporary Disability Insurance
Only five states offer TDI to employees for off-the-job short-term illness or injury, which includes pregnancy. New York’s $170 maximum weekly benefit ranks last, with the benefit replacing 27% to 28% of the wages of a minimum wage employee in New York. In comparison, wage replacement rates for minimum wage and living wage workers range from 58% to 85% in the other states that offer this benefit, including California and New Jersey. No changes have been made to the maximum benefit provided under this program since 1989.
Paid Family Leave
Only nine states and Washington, D.C. provide paid family leave benefits in 2024. As of Jan. 1, 2024, New York’s benefit rate is 67% of an employee’s average weekly wage, ranking 8th among the few states that offer this benefit. The amount is capped at a maximum benefit of $1,151, ranking 4th. DiNapoli’s report found that Connecticut’s policy is most beneficial to minimum wage workers, replacing 94% – 97% of income; however, New York’s higher maximum benefit makes its policy favorable for workers earning $100,000.
Report
New York’s Social Insurance Programs: Benchmarking Benefits
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