FINANCE

NEW YORK STATE SENATE FINANCE COMMITTEE — The state Department of Labor defended its pandemic response and outlined workforce modernization efforts during a joint legislative budget hearing on March 1, as lawmakers pressed officials on minimum wage indexing, unemployment insurance fraud, and worker protections. Commissioner Roberta Reardon told the Senate Finance and Assembly Ways and Means committees that the department distributed over $105 billion in unemployment benefits to nearly 5 million New Yorkers during the pandemic, while identifying $4 billion in fraud—representing 3.8 percent of total benefits paid. She said the state has clawed back $500 million in stolen funds and implemented safeguards including multifactor authentication and ID.me verification to prevent future fraud. Sen. Jessica Ramos, chair of the Senate Labor Committee, challenged the Governor's minimum wage indexing proposal as insufficient, noting that by 2026, Washington D.C., Denver, San Francisco, and Seattle will have minimum wages ranging from $19 to $21 per hour, while New York will reach only $16. She also questioned why home care workers remain excluded from certain wage protections and pressed Reardon on enforcement gaps, particularly regarding wage theft in nail salons and car washes. Reardon reported that in 2022 alone, wage theft investigations recovered $25 million for nearly 18,000 workers, with $360 million recovered over the past decade. She said the department has hired over 1,100 new employees in the past year and is expanding enforcement efforts, though she acknowledged the department operates on a tip-driven model rather than conducting routine workplace sweeps. Commissioner Timothy Hogues of the Department of Civil Service outlined modernization efforts, including transitioning civil service exams to online format—testing nearly 30,000 candidates for 200 job types in 2022—and implementing the Hiring for Emergency Limited Placement (HELP) program to waive exam requirements for approximately 100 critical health and safety positions for 12 months. Director Michael Volforte of the Office of Employee Relations reported that the state has extended a $3,000 healthcare worker bonus to over 39,000 state employees and recently implemented 12 weeks of paid parental leave at full pay for unrepresented state employees. He noted the office will negotiate new collective bargaining agreements with nine unions this year. Assemblywoman Latoya Joyner, chair of the Assembly Labor Committee, questioned whether the department is prepared to implement partial unemployment insurance benefits and pressed for assurances that expanded DOL staffing will translate to increased enforcement oversight. Reardon said partial UI is currently available but not automated, and will be fully integrated into the new system once the department completes its four-year modernization plan of its aging COBOL system. NEW YORK STATE OFFICIALS DETAIL PANDEMIC FRAUD RECOVERY AND WORKFORCE MODERNIZATION EFFORTS State Department of Labor Commissioner Reardon reported dramatic success in combating unemployment insurance fraud, telling a joint legislative hearing on March 1 that the state reduced fraud losses from over $300 million monthly during the pandemic's first year to just $388,000 in 2022—a 99.9 percent reduction achieved through implementation of ID.me verification and multifactor authentication systems. Reardon testified that the state has referred over one million fraudulent claims to federal authorities and recovered approximately $500 million in stolen benefits. She attributed the initial fraud surge to federal CARES Act provisions that required only a checkbox to prove pandemic-related unemployment, eliminating traditional wage verification methods that normally prevent fraud. "The first year of PUA, all you had to do essentially was check a box that said 'I was unemployed by the pandemic,' and you were eligible," Reardon explained. She acknowledged that money stolen by international cyber-rings will likely never be recovered, but pledged aggressive pursuit of domestic fraudsters with no statute of limitations. Department of Civil Service Commissioner Hogues outlined sweeping modernization proposals to address critical workforce shortages, including 12 Centers for Careers in Government across the state, continuous recruitment with online exams, and a comprehensive pay structure study to compete with the private sector. The Executive Budget proposes nearly 23,000 new hires to address a 12,500-worker shortage, with 26 percent of the current workforce eligible for retirement within five years. Sen. Jackson, chair of the Civil Service and Pensions Committee, pressed officials on the extent of service contracting, noting that over 9,000 full-time-equivalent positions are currently contracted to private firms. He also questioned the pace of labor negotiations, with one union currently operating under an expired contract. Sen. Martins raised concerns about prevailing wage enforcement in construction trades, stating he has heard for years that compliance verification is inadequate. Commissioner Reardon acknowledged she had not received formal complaints from the building trades and invited them to contact her directly. The hearing also addressed unemployment insurance debt repayment to the federal government. Reardon noted that New York is one of eight states that signed a letter to Treasury Secretary Janet Yellen requesting federal forgiveness of pandemic-era loans, so far without success. She indicated the state has already provided some relief through suspended experience rating, giving each business approximately $836 per employee over three years. Commissioner Hogues emphasized that civil service modernization proposals must be implemented comprehensively to be effective, stating: "Individually, the pieces won't work, but when we look at them comprehensively, that's when we really start moving forward." NEW YORK STATE SENATE FINANCE COMMITTEE EXAMINES WORKFORCE DEVELOPMENT BUDGET AMID UI DEBT DISPUTE Albany — State labor officials faced pointed questioning from lawmakers on March 1 over the administration's handling of pandemic-era unemployment insurance debt and controversial decisions to exclude home care workers from wage increases, during a joint legislative hearing on the 2023-2024 executive budget. Commissioner Reardon of the Department of Labor disputed the state Comptroller's estimate of pandemic UI fraud losses, claiming the actual figure was $4 billion rather than $11 billion. The state owes approximately $8 billion to the federal government and plans to collect roughly $6 billion from businesses over five years to rebuild the depleted UI trust fund. Several senators challenged the administration's decision to exclude home care workers from across-the-board minimum wage increases, despite the state having provided a $3 wage bump in 2021 specifically to stabilize the industry and attract workers. Sen. Krueger pointed out that the state still faces a severe home care worker shortage, with hospitals unable to discharge patients due to lack of available workers, and questioned the logic of removing wages that helped attract workers to the field. "If the wages have helped and we still have a crisis, taking away the wages seems to be counterintuitive," Krueger said. Commissioner Reardon cited a 33 percent increase in home healthcare workers since 2017 but acknowledged the crisis persists due to an aging population requiring more care. Sen. Rhoads argued the state should bear greater responsibility for UI repayment since the government, not employers, shut down businesses during the pandemic. He questioned whether federal regulations prohibit using the state's projected surplus to offset employer contributions. Sen. Ramos raised concerns about a 68 percent increase in child labor law violations in 2022, asking why there have been no criminal convictions. Commissioner Reardon acknowledged the problem and said violations are referred to district attorneys but declined to provide specifics on prosecutions. Commissioner Hogues of the Governor's Office of Employee Relations testified on civil service modernization efforts, noting the state's pay structure dates back to the 1950s. He highlighted a shift from traditional bubble-fill civil service exams to training-and-experience evaluations, saying preliminary data shows improved performance from test-takers using the new format. The hearing also addressed workforce development metrics, with Assemblyman Jacobson calling for mandatory annual reporting from all entities receiving state workforce development funds to track outcomes including job placement rates, wages, and long-term employment retention. NEW YORK STATE SENATE FINANCE COMMITTEE HEARS TESTIMONY ON WORKFORCE CRISIS, PENSION REFORM Albany — State lawmakers heard urgent testimony Wednesday about a deepening workforce crisis in New York government, with union leaders warning of a 12,500-worker deficit and 26 percent of the state workforce ready to retire, while advocates pressed for pension reform and pay equity. The joint legislative hearing on the 2023-2024 executive budget workforce development proposals revealed a state struggling to recruit and retain employees after a decade of hiring freezes and austerity budgets. Randi DiAntonio, vice president of the Public Employees Federation representing 50,000 state workers, testified that the state has clocked 20 million hours in overtime and faces a retention crisis driven by inadequate Tier 6 pensions, pay inequity with the private sector, and poor working conditions. "We have a problem on the front end with recruitment, we have a problem on the back end with retention," DiAntonio said. Joshua Terry of CSEA Local 1000 AFSCME noted that New York State has lost 13,000 employees net over the past decade, while local governments have lost 7 percent of their workforce. He urged lawmakers to waive the $40 civil service exam fee and conduct continuous recruitment with direct community outreach to reach people of color. Assemblywoman Stefani Zinerman raised persistent racial disparities in unemployment, noting that Black unemployment has been roughly twice the rate of white workers since the U.S. Bureau of Labor Statistics began tracking data in 1972. She pressed state officials on equity initiatives and career pathway programs. On pensions, Ed Farrell of the Retired Public Employees Association testified that 24 percent of retirees have pensions under $10,000 and nearly half have pensions under $20,000. He proposed a "catch-up" provision to address the inadequacy of the current cost-of-living adjustment, which he called "half a COLA" capped at 3 percent. Barabara Zaron, representing Management Confidential employees who cannot unionize, sought a 3 percent salary increase, $3,000 retention bonus, and a $70-per-month rebate for employees whose salaries were withheld between 2009 and 2015. Chairwoman Weinstein pressed Commissioner Reardon on the inadequacy of labor force data, noting that regional demographic data is only available on a five-year estimate basis, with the latest figures from 2017-2021. She requested more granular, frequent reporting to inform policy decisions. Commissioner Reardon said the Department of Labor aims to complete its system modernization by year-end 2023 but emphasized that "this system will not go live until it is completely tested," citing failures in other states. Senator Robert Jackson expressed strong opposition to Tier 6 pensions, stating bluntly: "Tier 6 sucks." DiAntonio agreed, saying Tier 6 members "pay more to get less" and see no incentive to remain in state service as a career. NEW YORK STATE SENATE FINANCE COMMITTEE HEARS WORKFORCE DEVELOPMENT BUDGET TESTIMONY — State employee unions, retirees, and labor advocates testified before the joint Senate-Assembly Finance Committee on March 1 regarding the 2023-2024 executive budget's workforce provisions, with testimony revealing deep structural problems in state employment, unemployment insurance, and wage enforcement. The hearing highlighted a crisis in state workforce recruitment and retention. Representatives from CSEA and PEF testified that staffing shortages are creating dangerous working conditions, with some employees working 50-70 consecutive hours in group homes because relief staff fail to appear. Josh Terry of CSEA called for lowering Tier 6 pension contributions to 3 percent, arguing that the current tier structure—where employees "pay more, get less, and work longer"—is driving away recruits at a time when agencies are critically understaffed. Randi DiAntonio of PEF identified multiple barriers to hiring: the Department of Civil Service lacks sufficient staff to process civil service exams, creating a bottleneck that causes job candidates to accept positions elsewhere. She also noted that contracting out has created a two-tier system where contracted workers earn more than state employees performing identical work. On unemployment insurance, James Parrott of the Center for New York City Affairs presented data showing New York's system is "severely flawed," burdened by an $8 billion federal debt. He attributed the problem to the state's unusually low taxable wage base of $12,300—lower than 35 other states despite New York having the highest average weekly wage nationally. This creates a regressive tax structure where small employers pay 3-4 times the effective tax rates of large corporations. Parrott recommended raising the taxable wage base to $50,000-$60,000, which could pay off the debt in 2-3 years while lowering taxes on small businesses. On minimum wage, Paul Sonn of the National Employment Law Project opposed the Governor's proposal as inadequate, noting it would result in a minimum wage of only $16+ by 2027—$4-5 less than comparable high-cost cities. He urged passage of the Raise the Wage Act, which would increase the minimum to $21.25 by 2026 with automatic annual indexing. Sonn cited five separate studies showing New York's $15 minimum wage produced no job losses. Hugh Baran of the Kakalec Law firm testified that the EmPIRE Worker Protection Act (A1893/S541) would generate approximately $30 million annually for the Department of Labor's wage theft enforcement, addressing a crisis where employers steal an estimated $3 billion yearly from workers. He noted DOL has fewer than half the investigators it had in the 1960s. Senators Martins and Ramos signaled openness to addressing Tier 6 reform and supporting minimum wage increases backed by research, while expressing concern about recruitment bottlenecks in civil service hiring. NEW YORK STATE SENATE FINANCE COMMITTEE HEARS COMPETING WORKFORCE DEVELOPMENT PROPOSALS Albany — The New York State Senate Finance Committee heard testimony Wednesday on competing workforce development proposals in the 2023-2024 executive budget, with advocates and policy experts sharply criticizing Governor Hochul's minimum wage and unemployment insurance proposals as insufficient. The hearing, which concluded the Legislature's three-week budget hearing cycle, featured testimony on four major initiatives: the Governor's minimum wage indexing plan, the Raise the Wage Act, the Unemployment Bridge Program for excluded workers, and the EmPIRE Act for wage theft enforcement. Advocates for the Raise the Wage Act, which would increase the minimum wage to over $21.25 by 2026 with annual indexing, argued it would benefit 2.9 million workers with average raises of $63 per week, compared to the Governor's proposal benefiting 900,000 workers with $13 per week. Tal Frieden of ALIGN's Raise Up New York coalition noted the proposal is backed by over 200 businesses and represents 1.3 million workers. Paul Sonn criticized the Governor's plan to freeze and phase out a $3 hourly wage premium for home care workers negotiated just 10 months earlier, calling it "counterproductive" given the urgent home care labor shortage. He also opposed the Governor's 3 percent cap on minimum wage indexing, noting that 16 of 19 states adjusting wages for inflation have no caps. James Parrott of the Economic Policy Institute defended minimum wage increases against inflation concerns, citing New York City's experience doubling its minimum wage between 2014-2019 with no noticeable inflation. He attributed recent inflation to supply chain disruptions, the Ukraine war, and corporate pricing power, not wages. On unemployment insurance, Parrott warned that New York's trust fund lasted only two weeks before requiring federal borrowing in the recent recession, and recommended reforming the tax structure. The current taxable wage base is $12,300. Advocates testified for the Unemployment Bridge Program, which would provide benefits to 750,000 workers excluded from traditional unemployment insurance, including freelancers, undocumented workers, and people reentering from incarceration. The program would provide up to $1,200 monthly for six months, funded through a digital ad tax expected to generate $1 billion statewide. Angeles Solis of Make the Road New York noted that undocumented immigrants paid $1.4 billion into the UI system over the past decade but cannot access benefits. Lucas Sanchez of New York Communities for Change emphasized the program's role in reducing recidivism, which costs $50,000 annually per person compared to $7,200 maximum for the bridge program. Hugh Baran testified on the EmPIRE Act, which would allow private attorneys and nonprofits to enforce labor law violations. He cited California's similar PAGA law, which generated an average of $67 million annually from 2016-2021, and estimated New York's version would generate $30 million yearly with a $500 per worker per pay period per violation penalty. Adam Flint testified on behalf of climate education and clean energy careers advocates, proposing a $3 million interagency working group to address gaps in workforce development for clean energy jobs needed to meet the state's climate goals. He noted the Governor's Strategic Workforce Development Office fund was zeroed out for the year. Chairwoman Liz Krueger expressed concern about potential recession and the need to implement unemployment insurance reforms quickly, noting the state could look to other states' models for implementation. Senator Robert Jackson indicated willingness to override a gubernatorial veto to protect home care worker wages. The hearing marked the final panel of the 2023-2024 budget hearing cycle.