Albany Agenda

Correcting disinformation about the excluded workers fund

Advocates attend an excluded workers rally on April 4.

Advocates attend an excluded workers rally on April 4. lev radin/ Shutterstock

In 2010, it was the MTA payroll tax. In 2012, it was same-sex marriage. And in 2020, it was bail and police reform. Now, a new wedge issue seems to have emerged for Republicans in New York ahead of the 2022 elections: providing unemployment benefits to undocumented workers. Already, it seems that disinformation about the $2.1 billion so-called excluded workers fund is beginning to spread as Republicans in the state and even nationally express staunch opposition to the program.

Assembly Member Kieran Michael Lalor appeared on the right-wing news network Newsmax and falsely stated that undocumented immigrants who can’t prove residency can still receive benefits. That was after he published an op-ed that erroneously said the fund is $5 billion, inflated the maximum benefits it would provide and perpetuated the idea that all undocumented immigrants don’t pay taxes by saying they don’t contribute to unemployment insurance. In an email to City & State, Lalor doubled down on the erroneous $5 billion number without saying where in the budget it comes from, said that he wrote the op-ed before negotiations were finalized to explain the erroneous payout number (despite the piece referring to the passed budget) and said that excluded workers by definition don’t pay into unemployment.

Assembly Member Colin Schmitt, who recently announced he’s running for Congress, also appeared on Fox News’ “Tucker Carlson Tonight” on April 8 to discuss the fund. Carlson introduced the segment with more false statements by saying it’s “unclear” how applicants will prove they are eligible, despite fairly clear guidelines in the legislation.

The excluded workers fund will likely remain a topic of conversation for months to come, and into the next election cycle as well. As people continue to discuss the merits or detriments of the fund, it’s important first to make sure all the facts about it are understood. Read on for some answers.

Do applicants need to prove who they are?

Yes. For identification, a variety of documents will be accepted with different point values assigned to them. In total, someone applying would need to have four points worth of documentation. Things like nonexpired driver's licenses, U.S. passports and an IDNYC card – an ID available to any New York City resident including undocumented immigrants – are worth four points. A nonexpired non-U.S. passport is worth three points. Things like foreign birth certificates, marriage licenses and high school diplomas are worth one point. The commissioner of the state Department of Labor also has the authority to determine and accept other forms of ID and assign them values of less than four points.

How much is the fund and who is it for?

The state created a $2.1 billion fund as part of the $212 billion budget to provide financial aid to anyone who was laid off during the pandemic who has not been eligible for unemployment or received any federal COVID-19 relief or stimulus money. An earlier version of the fund discussed during negotiations included people recently released from incarceration, but the version that passed makes them ineligible due to federal aid available to those people. That leaves undocumented immigrants as the sole beneficiaries of the fund.

What time period do the payments cover?

The fund offers one year of retroactive unemployment payments, starting on March 27, 2020 through April 1, 2021. Unlike earlier iterations of the bill language, the final version does not provide any future unemployment payments for the remainder of the coronavirus pandemic.

Who administers the fund?

The fund will be overseen and administered by the state Department of Labor, with the labor commissioner given considerable control over enacting any additional rules and regulations necessary for the program.

How much money can individuals receive?

The fund is split into two tiers based on the documentation provided to prove work-based eligibility. The top tier offers up to a $15,600 lump sum, with $780 deducted in taxes. Those who qualify for the second tier would receive a $3,200 payment, with a $160 deduction for taxes. Other, higher numbers have been mentioned in debate and press releases in relation to the fund, but no one person will get more than $15,600 through the excluded workers fund.

That seems like a lot of money to be handing out.

$2.1 billion is certainly no paltry sum, and a $15,600 payment is nothing to sneeze at. But while the lump payment seems large, it represents a full year’s worth of unemployment and equals $300 a week for 52 weeks. That’s the lower amount of federal pandemic unemployment benefits that have been available to many Americans since August 1, 2020. Prior to that, from March 27 to July 31, 2020, people could get $600 in unemployment from the federal government, but that does not appear to factor into the excluded workers fund. In May of 2020, the average weekly unemployment benefit in New York was $345.74. It is true that both tiers of payments come out to more money that someone may have received strictly in direct stimulus payments, but those also went to people still employed.

What’s to stop people from coming to New York looking for payouts?

In addition to providing ID, anyone applying for funds, regardless of the tier, needs to prove that they currently live in New York and lived in the state prior to March 27, 2020. If the document proves both, then only one is needed. Otherwise two or more are needed to prove past residency and current or ongoing residency. Some of the accepted documents include a New York driver’s license, a utility bill, a bank statement or a lease. Forms and documents used to prove identity can also be used to prove residency. The labor commissioner also has the authority to accept other documents that they deem acceptable. Some raised similar concerns when the state allowed undocumented immigrants to get driver’s licenses in 2019, although as of yet, there has been no empirical data to suggest the law caused an influx of new, undocumented residents.

How does someone actually prove they’re eligible for the fund?

First, anyone applying must show they meet the definition of an excluded worker, but what that would require isn’t actually made clear in the bill language. They additionally need to show that they did not earn more than $26,800 in the past year.

Then there is proving that someone previously worked and lost their job or income during the pandemic. To access the top tier of benefits, the applicant must prove they filed a tax return in 2018, 2019 or 2020 using an individual tax identification number. They can also provide a letter from a past employer, six weeks of pay stubs or wage statements from before job loss, a W-2 or 1099 from 2019 or 2020 showing income, or a formal wage notice from an employer. The bill text also gives the labor commissioner authority to create additional regulations that would permit other forms of documentation they may deem acceptable, as long as they adequately prove at least six weeks of employment within six months of becoming eligible for benefits under the fund. According to the Fiscal Policy Institute, a left-leaning think tank, about 92,000 people would qualify for tier one benefits.

If someone applying can’t provide any of this documentation, they could still receive the lesser funds available through the second tier. According to the Fiscal Policy Institute, about 199,000 would benefit from tier two benefits.

Do undocumented people pay into unemployment?

Technically, no employee in New York pays into unemployment as it’s a tax on employers, but their employment is what leads to the pay-ins. While it’s impossible to know whether every person who will receive benefits has paid state, local or federal taxes, the available research shows that the majority of undocumented immigrants do pay taxes. According to a 2020 report conducted by the Institute on Taxation and Economic Policy, undocumented immigrants in New York are responsible for the payment of $1.4 billion into state and federal unemployment insurance over the past decade. It was the first study of its kind, but past national research has shown that anywhere between 50% and 75% of undocumented people pay income taxes, and they contribute billions of dollars a year nationwide in taxes. So while they are ineligible for the traditional benefits, many do pay into them. And despite claims otherwise, the majority of data on the subject conclude that immigrants, undocumented or otherwise, help economic growth in the country, and generally contribute more than they receive back.

Are there protections against fraud?

As with any program, potential for fraud exists, and it’s a valid concern when talking about such a large sum of money. Before any payments are made, legislation states that the state attorney general will need to review all rules and regulations to ensure that funds are protected against fraud and abuse. State Attorney General Letitia James said in a statement that her role will be to ensure that the program is constitutional, although she doesn’t explicitly mention fraud. In response to James, state Sen. Jessica Ramos and Assembly Member Carmen De La Rosa – who sponsored a stand-alone bill to create the fund – said that it’s the responsibility of the commissioner of labor to ensure the program is safe from fraud.

The legislation also includes penalties for those who make false or fraudulent claims while applying for benefits through the fund. Anyone found to have knowingly included false statements or have excluded material information pertinent to one’s eligibility status would be guilty of a class E felony.

If someone’s undocumented, isn’t there a good chance they’re already using fraudulent documents?

It’s true that some undocumented immigrants make use of fake social security numbers in order to work and to pay taxes, which is a federal felony. Different administrations, prosecutors and judges treat these cases differently, as intent plays a role in these cases. And immigration advocates are often at odds with victims of identity theft. But the fund would not permit tax returns with a social security number to get submitted to access benefits. And there is no evidence to suggest that undocumented immigrants regularly deal in other kinds of falsified documents needed to prove residency and work history required to get payouts, nor evidence that undocumented immigrants commit crimes at a higher rate than citizens.

Does the creation of this fund mean the state isn’t providing aid to citizens and legal noncitizen residents?

While it’s true that this $2.1 billion fund is meant for undocumented immigrants, and thus doesn’t provide aid to other classes of New York residents, the state is providing plenty of support to other people. The beneficiaries of this fund have not received any unemployment or federal stimulus money during the course of the pandemic, whereas many unemployed or low-income citizens have received at least some support, whether through unemployment, one-time federal stimulus money or both. That’s on top of any other federal relief money that businesses or other entities may have received. In this year’s $212 billion state budget, the state is providing $1 billion for small businesses, $2.4 billion for rent relief, $600 million for homeowner relief and tax cuts for the middle class. Does the state budget this year provide for every single person and class of resident who may be suffering during the pandemic equally? It would be impossible to say yes, but certainly this $2.1 billion fund does not inherently mean the state is leaving other suffering New Yorkers high and dry.