ALBANY, N.Y. (NEWS10) — Local businesses are still feeling the effects of the pandemic. Many recently learned they have to pay the New York Labor Department a surcharge, so the state can repay billions of dollars in debt to the U.S. Treasury for unemployment benefits.

When the pandemic led to record unemployment, the state took out a loan to pay out benefits. The amount currently owed on the loan is about $8.1 billion. As a result, businesses statewide have to pay an Interest Assessment Surcharge by September 30th.

Jason Pierce, owner of Albany restaurants Savoy Taproom and The Copper Crow, said post-pandemic, he held job fairs and offered bonuses, but it was difficult finding anyone to work for him.

“We begged for the unemployment to stop, for it to be abated, but it went on,” Pierce explained, “and now here we are being asked to literally pay for it again, when we struggled through it once already during the pandemic. To be frank, it’s unfair.”

Matt Doheny, General Manager at ABC Sports & Fitness shares the frustration. He told NEWS10 he’s done everything he can to avoid raising prices for his customers, despite the impact of COVID.

He said with over 50 employees, this will be a major expense for ABC, adding, “our overall expenses are up 24% year to year. Now, this additional burden imposed on my small business by the state after they forced us to close for 6 months is not right.”

While the cost is only about $27.60 per employee, Ken Pokalsky, Vice President at the Business Council of New York State said it can add up to be a significant pain.

“Employers are already paying significantly higher unemployment insurance taxes than they did pre-pandemic, and it’s on top of all the other things that have gotten more expensive: Cost of labor, cost of fuel, cost of materials, cost of supplies,” Pokalsky said.

“By failing to tackle the state’s unemployment insurance debt in this year’s budget, New York’s already high cost of living will rise to new heights,” said Justin Wilcox, executive director of Upstate United, a coalition made up of business and trade organizations from across Upstate New York. “New York’s current $7.7 billion debt will be shouldered by struggling employers and ultimately consumers. This crisis comes at a time when businesses are dealing with high inflation, labor force issues and supply chain problems. Employers need meaningful UI relief, not empty rhetoric from Albany.”

In a statement, the Department of Labor said, “New York State has already taken steps to reduce the impact on businesses – including a formal request to the federal government to forgive the loan – and will continue to monitor the Fund’s balance as it works to eliminate the debt.”

IAS letters started going out in mid to late July. Per state law, all New York businesses that pay unemployment insurance (UI) contributions to the State are liable for the IAS.