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Decision No. 13,483

Appeal of PERRY LESSING from action of the Board of Education of the Saranac Lake Central School District with regard to the enforcement of a Commissioner's decision.

Decision No. 13,483

(September 11, 1995)

Bernard F. Ashe, Esq., attorney for petitioner, Kevin H. Harren, Esq., of counsel

Robert E. White, Esq., attorney for respondent


SHELDON, Acting Commissioner.--Petitioner seeks clarification and enforcement of Appeal of Lessing, 34 Ed Dept Rep 451, in which Commissioner Sobol ordered the Board of Education of the Saranac Lake Central School District ("respondent") to reinstate petitioner to his former teaching position in the district, with back pay less any compensation he may have received from other employment. The appeal must be sustained.

On June 30, 1994, respondent terminated petitioner's employment. From July 1, 1994 until January 15, 1995, petitioner received $7,800.00 in unemployment benefits from the New York State Department of Labor, Unemployment Insurance Division. Petitioner instituted this appeal because respondent is now seeking to offset petitioner's back pay against those unemployment insurance benefits.

Petitioner contends that unemployment benefits are not considered compensation and may not be used to offset back pay calculations. Petitioner further asserts that he will repay any appropriate amount to the Unemployment Insurance Division pursuant to Labor Law '597(4). Respondent argues that because the district has opted under Labor Law '565 to make a dollar for dollar payment to the State in the amount of any unemployment benefits actually paid to its former employees instead of making traditional unemployment insurance contributions, the district, not the State Labor Department, has effectively compensated petitioner $7,800.00. Accordingly, respondent wishes to offset the back pay award to petitioner in the amount of $7,800.00.

Courts have traditionally recognized the separation of obligations between an employer and employee with respect to unemployment insurance benefits (Matter of Middleton, 16 Ed Dept Rep 368; Marshall Field and Co. v. NLRB, 318 US 253, reh den 318 US 802; NLRB v. Gullett Gin Co., 340 US 361; Matter of Cassaretakis, 263 AD 773, rev'd 289 NY 119, aff'd 319 US 306). As the Court of Appeals stated in Matter of Cassaretakis, supra (at p. 126):

The obligations of the employer under this law are not to his employees but the State. Likewise, claimants of benefits assert their rights against the State and not against the employer. The employer's duty to pay contributions and the employee's right to receive benefits are independent of each other. The employer must continue to pay the tax although none of his employees ever becomes entitled to benefits through lack of employment; the employee has a right to receive benefits upon becoming unemployed although his employer has failed to contribute.

The United States Supreme Court has held that unemployment benefits are not "earnings" which must be deducted from back pay awarded by the National Labor Relations Board (Marshall Field and Co. v. NLRB, supra; NLRB v. Gullett Gin Co., supra). As has been previously held by the Commissioner of Education, unemployment benefits received by a former teacher are not "earnings from other employment" within the meaning of a Commissioner's order to award back pay less any compensation (Appeal of Middleton, supra). These benefits, however, are recoverable by the Unemployment Insurance Division of the Department of Labor pursuant to Labor Law '597(4).

I am unpersuaded by respondent's argument that the district, and not the State Labor Department, has effectively paid petitioner $7,800 in unemployment benefits. Respondent reasons that the district has paid petitioner and not the State Labor Department because it does not pay unemployment insurance tax to the State Labor Department but instead makes a dollar for dollar payment to the State under Labor Law '565 for any unemployment benefits awarded to its former employees. However, the method which respondent chooses to pay the district's contributions to the State Labor Department to offset the cost of its former employees' unemployment benefits is of no moment in this appeal. The reality is that petitioner sought and received unemployment benefits from the State Labor Department, not from respondent. Moreover, any dispute respondent has with the State Labor Department concerning repayment of the district's contributions is not an issue involving petitioner. Accordingly, I consider the unemployment benefits paid to petitioner to be the same as unemployment benefits paid to former employees in the above-cited cases and Commissioner's decisions. Because it is well established that unemployment benefits are not considered compensation for the purposes of computing back pay, I find that respondent may not reduce petitioner's award by the unemployment benefits he has received.


IT IS ORDERED that respondent board of education forthwith pay to petitioner the salary he would have earned from the effective date of the termination of his services to the date of reinstatement, less any earnings petitioner may have had from other employment, consistent with this decision.