Massive Pay Increase Buried In New York’s Budget Deal

Top officials say "this is a huge victory" for New Yorkers.

As part of the 2026 New York State Budget, Gov. Kathy Hochul says the state is making "landmark reforms to strengthen and protect our workforce across the state."

New York State Finally Increasing Unemployment Benefits

New York’s budget just delivered a major win for workers and businesses—something you don’t see often in Albany.

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According to Hochul's office, New York State will pay off the Federal Unemployment Insurance debt, increase the maximum benefit rate for workers who have lost their jobs, and strengthen unemployment insurance benefits for striking workers.

Governor Kathy Hochul agreed to wipe out the state’s massive $6.2 billion unemployment insurance debt as part of her final deal with lawmakers. That’s the money New York borrowed from the feds to cover record jobless claims during the pandemic. Businesses have been footing the bill ever since through higher taxes, and the state still had years to go before the debt would be cleared.

How Much Will Benefits Increase?

Since 2019, weekly unemployment benefits have been capped at $504. While unemployment benefits are not meant to last a year, the maximum yearly benefit was $26,208.

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The budget deal nearly doubles the weekly unemployment benefits cap. The weekly maximum increases to $869 this year, with more increases planned in future years.

"These actions will increase benefits for workers who have lost their jobs and prevent projected spikes in employer contributions, saving employers an average of $100 per employee in 2026 and $250 per employee in 2027," Hochul's office states.

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Assembly Labor Committee Chair Harry Bronson, who has been pushing for an increase, says, "This is a huge victory” for New Yorkers.

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