NewsLocal News


Rise in unemployment insurance rate is a roadblock to recovery, restaurants say

Posted at 11:46 PM, Apr 19, 2021
and last updated 2021-04-19 23:46:30-04

BUFFALO, N.Y. (WKBW) — At Butera's restaurant in Hamburg, every pizza and beer is a sign of recovery. Owner-operator Jimmy Butera said a change in his weekly payment to the New York State Department of Labor is making that recovery harder.

“We haven’t laid anybody off, we haven’t let anybody go, we've remained open throughout the pandemic, yet my unemployment insurance rates went up significantly," Butera said.

The New York State Restaurant Association (NYSRA) said the DOL raised the initial unemployment insurance rate for businesses across the state. Butera said this adds to other industry roadblocks, like fewer people seeking jobs.

NYSRA President and CEO Melissa Fleischut said rates used to be based off how many employees were on unemployment insurance. State lawmakers passed a bill so rates would not increase due to layoffs and furloughs during the pandemic.

“Collectively everybody thought that was gonna be good news, we wouldn’t see our rates increase, and it was one more thing we didn't have to worry about coming out of the pandemic,” Fleischut said.

She said one local restaurant saw its rate more than double in 2021, from $201.45 to $471.00 a week.

“You may be better off than if you had been dinged for a furlough and layoff due to the pandemic, but everybody saw their rates go up, and it came as a real surprise to the restaurant industry,” Fleischut said.

In a statement, the DOL said it understands businesses need support right now, which is why employers are not charged for pandemic related layoffs.

“The administration certainly understands that businesses need support during the ongoing public health crisis, which is why we’ve statutorily capped unemployment insurance increases and modified the program so that employers aren’t charged for workers laid off as a result of the pandemic. Meanwhile, businesses in New York State have access to an estimated $57 billion in federal support through the Paycheck Protection Program, the FY 2022 Budget is providing $1 billion in support for businesses, and the state worked with the private sector to provide a $100 million loan fund for small businesses, among other initiatives, and the state has paid out more than $70 billion in unemployment insurance benefits to more than 4 million claimants — funds that are then spent in communities across the state.”
NYS Dept. of Labor

“There's got to be another way that they can get that money back, recoup that money, than taking it out of the businesses that are already suffering due to the pandemic," Butera said.