Bills have been introduced in the state Legislature to create an $800 million unemployment program for excluded workers.

Sponsored by Sen. Jessica Ramos, D-Jackson Heights, and Assemblywoman Karines Reyes, D-Bronx, S.8165/A.9037 would amend the state Labor Law to create an Excluded Workers Fund for workers who are left out of traditional worker services, including unemployment.

To be eligible, workers must not have received any unemployment benefits within 12 months of application or not have received an error payment when they were previously ineligible for benefits. Workers would also have to show they have provided a service in the past for which they were paid in cash, personal check or non-payroll check; did not report the wages to the IRS; not received a wage statement from the employer; and did not not receive a Form 1099-NEC.

Ramos and Reyes say those benefiting would include domestic workers, landscaping and groundskeeping workers, day laborers, construction workers and street vendors. Many of the same workers were able to claim $15,600 from the state’s $2.1 billion Excluded Worker Fund in the 2021-22 budget. Money from the fund was claimed by some 290,000 workers, Reyes and Ramos wrote in their legislative justification, and the fund quickly ran out.

“Still, this fund was exhausted quickly and does not fix the fact that some workers are still excluded from the overall unemployment system,” Ramos and Reyes wrote. “The Excluded Worker unemployment Act rectifies this exclusion by creating an unemployment insurance program, not only for the undocumented community, but also those who hold ‘non-traditional’ forms of employment including but are not limited to domestic workers, landscaping and groundskeeping services, day laborers, construction workers, and street vendors.”

The Fund the Excluded Workers coalition held multiple events around the state and New York City to call on Gov. Kathy Hochul for a $3 billion expansion for the exhausted Excluded Workers Fund and a permanent unemployment insurance alternative for undocumented workers, and others excluded from unemployment benefits. It’s been estimated by advocates as many as 50,000 people a month could claim the new unemployment benefit.

CONCERNS RAISED

State Sen. George Borrello, R-Sunset Bay, last week raised concerns on the state Senate floor over the state’s handling of its unemployment insurance fund.

During the height of the pandemic, unemployment claims skyrocketed in New York, prompting former Gov. Andrew Cuomo to borrow $11 billion from the federal government to pay the claims. There is now $9.3 billion remaining on that loan — and the presence of the loan is driving up costs for businesses. Business groups have said it will cost a decade for the loan to be paid off, meaning businesses will be paying higher unemployment fund contributions at least that long.

“This is a good step,” Borrello said. “It will help us. But ultimately we are going to have to pay that bill at some point. And right now we are kicking that can down the road as interest accrues on that $9 billion that is on the backs of every single employer in New York state. That’s the troubling part of this.”

As written, the Excluded Workers Fund is paid for with an allocation from the state treasury general fund. Borrello was also an outspoken opponent of the original Excluded Workers’ Fund, saying it was one of the primary reasons he voted against the state’s 2021-22 budget.

“Much of this tax revenue will support the creation of a $2.1 billion fund that will allow individuals who were ineligible for unemployment insurance during the pandemic to receive payouts of up to $15,000 per person. This is a politically-driven item with an unacceptably high price tag, particularly with our state’s unemployment insurance fund depleted by the unprecedented demand of the pandemic. Struggling small businesses are now being hit with insurance rate increases that threaten their survival,” Borrello said last year. “This reckless combination of tax and spending increases will have severe and long-term consequences on our state and its future, from lost jobs and shrinking opportunities, to the continuing exodus of residents to more affordable states. New York was already number one in outmigration and that trend is now poised to accelerate.”

HOW THE PROGRAM WOULD WORK

Workers would have to prove they faced a loss of earnings leading to partial or total unemployment, worker at least 3.5 months and earned at least $4,050 in gross earnings, experienced a permissible reason for the loss of earnings and be capable and ready to work. Funding would be available for six months.

Identification would be required to prove New York state residency, with acceptable identification including photo identification issued by the state, foreign government or federally issued photo ID such as a license, passport, work permit or identification valid or within two years of expiration; photo or school ID, state-issued hospital card, state Corrections ID, charitable organization photo ID or a labor organization ID; foreign driver’s licenses, taxpayer identification, marriage or divorce papers, a Social Security statement letter, a U.S. school diploma, written employment offer, paystubs or any document approved by the state labor commissioner.

Proof of work history would be verified through wage statements, employee or client letter, complaint or report alleging employment, non-payroll checks; federal tax returns for the year immediately prior, state tax return or W-2 forms; financial statements, receipts, employer ID badge, written proof such as email or texts, employer contact info or record of commute; or credibility interviews.

“The new fund establishes in-depth requirements and procedures making it possible for members of these communities to apply and receive benefits for their ongoing unemployment. Given the variety of circumstances these workers face, this legislation establishes fair and accessible methods of employment and identity verification through a point system. This allows for a safe and effective method of application for the most variable members of the community in which the Excluded Workers Fund aims to serve,” Reyes and Ramos wrote.

ALLEGATIONS OF FRAUD

Fraudulent activity targeting the $2.1 billion Excluded Workers Fund (EWF) has prompted state officials to put a block on the ability of cardholders to get cash benefits from automatic teller machine last month. Recipients were issued Electronic Benefits Transfer cards, similar to debit cards, which at least initially could have been used at ATM machines for quick withdrawals of cash.

The state Department of Labor, responding to an inquiry from CNHI, acknowledged the ability of recipients to use those cards at ATMs was terminated Dec. 28.

“Out of an abundance of caution, we suspended the option to withdraw cash from ATMs for cardholders with a remaining balance on their prepaid cards,” Aaron Fallon, a Labor Department spokesman said.

The move, he said in a statement, is designed to protect New Yorkers from “becoming a victim of fraud” and ensure the money goes to the intended recipients, while blocking “bad actors from preying upon New Yorkers.”

“These cardholders have the option to make free withdrawals in-person at most banks and credit unions that accept Visa debit cards,” Fallon added.

State Police, meanwhile, confirmed its detectives are assisting the Labor Department in an investigation into suspected misuse of the cards. State officials provided no details on the extent of the suspected fraud in the distribution of the benefits.

State Sen. Dan Stec, R-Queensbury, who opposed the creation of the fund, called the suspected fraud disturbing. He urged State Police and Hochul “to throw the full force of their authority behind this investigation so the taxpayers can find out what is going on.”

Stec argued fraud within the program was inevitable as its beneficiaries include people who are in the country illegally.

“This is taxpayer money, and they are throwing it around like it is not real,” Stec said.

— The CHNI, through APStoryShare, contributed to this story