In a major victory for businesses across the Empire State, Governor Kathy Hochul and state legislative leaders have agreed to fully repay New York’s $6.2 billion Unemployment Insurance (UI) debt through the newly adopted state budget, eliminating the burdensome surcharge employers have been forced to pay since the pandemic.
“This is long overdue—but absolutely the right move,” said Senator Dean Murray, Ranking Member of the Senate Commerce, Economic Development, and Small Business Committee. “Businesses across New York were saddled with this debt through no fault of their own. They didn’t cause the shutdowns. They didn’t ask for this burden. And yet they’ve been footing the bill for years. I’m incredibly pleased that our calls have finally been heard.”
The debt originated during the early months of the COVID-19 pandemic, when the state borrowed billions from the federal government to fund an unprecedented wave of unemployment claims following state-mandated business closures. In the years since, employers have been forced to repay that debt through the Unemployment Insurance Assessment Surcharge (UIAS), costing them hundreds of millions of dollars annually.
“This was a hidden tax on employers, hospitals, nonprofits, and local governments,” Murray continued. “Now, finally, they can breathe easier. And this move will ripple outward—it will help reduce the cost of doing business, which ultimately lowers the cost of goods and services for all New Yorkers.”
Governor Hochul framed the decision as a practical, pro-business policy move in a tough economy.
“I can see down the road—and it’s not that far—where we’re going to have layoffs in businesses,” Hochul said. “We’re going to have businesses that are struggling to make payroll themselves. And I found that this was an opportunity for me to really lift a major burden off these businesses. They’ve been asking for this for a while. Call this my counter to the tariffs.”
Murray, who has been a leading voice pushing for full repayment of the debt, emphasized the broader economic impact. “By removing this massive expense, businesses can reinvest in their operations, hire more workers, and lower consumer prices. This is a win-win for our state’s economy,” he said. “It’s not just a short-term relief—it’s a long-term investment in New York’s recovery.”
Assemblyman Joe DeStefano echoed that sentiment. “We’ve been pushing for this for a long time. What New York businesses needed wasn’t a patchwork of election-year giveaways. They needed real relief—something meaningful. This is it,” he said. “Getting rid of the UI surcharge puts money back in the pockets of employers and lets them focus on growing, not just surviving.”
Business advocates also celebrated the move. Heather Mulligan, President and CEO of the Business Council of New York State, called the repayment “a massive relief.”
“This debt cost businesses over $6 billion, removing the opportunity for many small employers to reinvest in their businesses or local economies,” she said. “Now, they can finally begin to rebuild.”
Ashley Ranslow, New York State Director for the National Federation of Independent Business (NFIB), said the move could not have come at a better time.
“This agreement will save small businesses hundreds or thousands of dollars per year,” Ranslow said. “This relief will go a long way in helping Main Street businesses invest in their operations, employees, and contend with other financial challenges.”
Murray praised the bipartisan decision and called for continued efforts to support New York’s economic growth.
“This is what government should be doing—listening to the people and acting responsibly,” he said. “Let’s build on this momentum and keep working to make New York a better place to do business, to work, and to live.”
With the debt finally paid off, the UI Assessment Surcharge will be lifted, bringing an end to one of the last major financial aftershocks of the COVID-19 crisis.