What Form IA 12.3 Is For
New York Form IA 12.3, officially titled "Record of Employment," is a separation notice that employers must provide to employees when they leave the job. Think of it as an official receipt of employment that helps workers apply for Unemployment Insurance (UI) benefits if they become unemployed or have their hours significantly reduced.
This simple one-page form serves two important purposes. First, it informs separated employees about their potential right to file for unemployment benefits and provides instructions on how to apply. Second, it ensures that the New York State Department of Labor (DOL) has accurate employer information to process benefit claims correctly and charge the right employer accounts. The form includes basic details like your employer's name, their New York State employer registration number, the address where payroll records are kept, and guidance for applying for benefits.
Under New York law, this isn't just a courtesy—it's a mandatory requirement. Every employer who has employees covered under the state's Unemployment Insurance program must provide Form IA 12.3 (or an approved equivalent) whenever an employment separation occurs, regardless of whether it's temporary or permanent, voluntary or involuntary.
When You’d Use Form IA 12.3
Total Separation
When an employee is permanently laid off, discharged (fired), quits their job, or is indefinitely separated from employment. Even if an employee voluntarily resigns, you must still provide the form—the law does not distinguish between voluntary and involuntary separations.
Partial Unemployment Situations
As of 2023, New York expanded the notice requirement to cover situations where employees become eligible for partial unemployment benefits due to reduced hours or wages. You must provide Form IA 12.3 when an employer-initiated action reduces an employee's work to fewer than 30 hours per week OR when their weekly earnings drop below the state's maximum benefit rate (which changes annually). For 2024, employers should check the current maximum benefit rate on the DOL website.
Special Circumstances
The requirement applies to seasonal workers at the end of their season (unless they've been given reasonable assurance of rehiring), restaurant workers whose schedules vary weekly, and temporary workers between assignments if there's a gap causing total or partial unemployment. However, educational institutions that provide "reasonable assurance" of continued employment for the next academic term, and employers operating under an approved Shared Work Plan, are exempt from providing the notice.
Late or Missed Notices
If you failed to provide Form IA 12.3 at the time of separation, provide it as soon as you discover the omission. While there's no formal "amended" version of this form, if you provided incorrect information (such as a wrong employer registration number or payroll address), issue a corrected form to the employee immediately. Late or inaccurate separation information can delay benefit processing and may result in incorrect charges to your unemployment insurance account, potentially affecting your future UI contribution rates.
Key Rules or Details for 2024
Mandatory Compliance
Every employer liable for New York Unemployment Insurance contributions must provide written separation notice. This applies to all employer types—private businesses, nonprofits, governmental entities, Indian tribes, agricultural employers, and household employers. The only narrow exceptions are for educational institutions providing reasonable assurance and approved Shared Work participants.
Required Form Elements
You may use the official Form IA 12.3 available from the DOL website, or you may request approval for an equivalent substitute form. Whichever you use, it must contain four mandatory elements:
- the employer's legal name
- the New York State employer registration number
- the complete mailing address where payroll records are kept
- clear instructions telling the employee to present or reference this information when filing for unemployment benefits
Missing any of these elements makes the notice inadequate.
Timing and Delivery
Provide the form on the employee's last day of work or when you notify them of the separation or hour reduction. The law requires notice "at the time" of separation—don't wait for the employee to request it or delay until their final paycheck. You should hand the form directly to the employee, or if that's not possible, mail it promptly to their last known address.
Applicability to All Separations
Whether the employee was fired for cause, laid off due to lack of work, quit voluntarily, was furloughed, had hours reduced below the partial unemployment threshold, or is seasonally separated, you must provide Form IA 12.3.
No Employee Request Required
This is a proactive employer obligation. You cannot wait for an employee to ask for the form.
Record Retention
New York employers must maintain employment tax records for at least four years. Keep copies of completed IA 12.3 forms as part of your personnel and payroll records.
Step-by-Step (High Level)
Step 1: Identify When Notice Is Required
Determine whether the employment change triggers the notice requirement.
Step 2: Obtain the Current Form
Download the most recent version from the DOL website or request bulk supplies.
Step 3: Complete the Employer Section
Fill in:
- employer name
- registration number
- FEIN
- payroll address
Step 4: Provide the Form to the Employee
Give the form at separation. The employee completes their own personal section.
Step 5: Retain Your Records
Keep a copy for compliance and audit purposes.
Step 6: Ensure Accurate Ongoing Reporting
Ensure consistency with NYS-45 filings and correct errors promptly.
Common Mistakes and How to Avoid Them
Mistake 1: Not Providing the Form for Voluntary Quits
Provide the form for all separations.
Mistake 2: Overlooking Partial Unemployment Situations
Train staff to identify reduced hours/wages triggers.
Mistake 3: Using Outdated Forms
Always use the latest version (IA 12.3 (11/23) or later).
Mistake 4: Providing Incomplete Employer Information
Use a pre-filled template and verify details.
Mistake 5: Failing to Provide the Form Promptly
Distribute on the last working day or immediately upon notice.
Mistake 6: Not Keeping Copies
Store copies systematically for proof of compliance.
Mistake 7: Assuming Certain Employees Don’t Qualify
Always provide the form—eligibility is determined by the DOL.
What Happens After You File
If the Employee Files for Benefits
You receive a Notice of Potential Charges (Form LO 400) and must respond within 10 days.
Account Charging
Benefit payments may impact your experience rating and contribution rates.
Monthly Statements
Review Form IA 96 for accuracy.
Rate Adjustments
Annual rate updates are issued via Form IA 98.
If You Contest Eligibility
You may appeal within 30 days if disputes arise.
No Immediate Filing
No action occurs unless the employee files.
Compliance Verification
Maintain records for audits and verification.
FAQs
What is Form IA 12.3 used for?
It notifies employees of potential eligibility for unemployment benefits and provides required employer information.
Is this the same as a termination letter?
No, it serves a separate legal purpose specific to unemployment benefits.
Do I need to provide it if rehiring soon?
Only if there’s a gap causing total or partial unemployment.
Can I use a custom form?
Yes, but only with DOL approval and required elements included.
What if the employee refuses the form?
Document the refusal and optionally mail a copy.
Do household employers need to provide it?
Yes, if they are liable for UI contributions.
How long should I keep copies?
At least four years.
Sources
This summary is based on information from the New York State Department of Taxation and Finance Employer's Guide to Unemployment Insurance, Wage Reporting, and Withholding Tax (NYS-50), the New York State Department of Labor Unemployment Insurance Employer Guide, the official Form IA 12.3, and the DOL Notice of Eligibility for UI Benefits page, all current as of 2024.
