Employer Requirements Under New Jersey Unemployment Compensation Law to Change

On November 3, 2022, New Jersey Governor Phil Murphy signed into law amendments to the New Jersey Unemployment Compensation Law, which go into effect on July 31, 2023. The amendments materially alter various aspects of the New Jersey Unemployment Compensation Law, including employer reporting requirements, deadlines for unemployment benefits determinations, penalties for employer noncompliance, and overpayment liability.

New Jersey employers will face new reporting obligations once the amendments go into effect.  Currently, employers must provide terminated employees with the State-issued Instructions for Claiming Unemployment Benefits (Form BC-10) immediately after separation. Once the amendments take effect, employers will also be required to “immediately and simultaneously” send the benefit determination information and a copy of Form BC-10 electronically to the New Jersey Department of Labor and Workforce Development (“DLWD”). The DLWD will be providing guidance regarding the content of the information that must be disclosed regarding the benefit determination. In essence, this effectively means that employers will be expected to submit separation information to the DLWD whether or not the separated employee files a claim for unemployment benefits.

Additionally, the amendments change several deadlines for the unemployment benefits determination process. For example, employers will be required to respond to DLWD requests for information within seven days of the request being made, while existing law provides for a ten-day window. When appealing an initial benefit determination and subsequent benefit determinations other than when benefits ended or were reduced, employers will have seven days after confirmed receipt to file their appeal, while claimants will have within 21 days of mailing to appeal. When appealing a subsequent benefits determination when benefits ended or were reduced, the claimant will have seven days following notification of the decision. Notably, current law does not address this scenario.

Employers will also soon be subject to stiffer penalties for failing to comply with the law. Namely, an employer that “willfully fails or refuses to furnish any reports or information” will be held liable for a fine of $500 per day or 25% of the amount fraudulently withheld. Each misrepresentation or failure to disclose a material fact and each day of such failure or refusal will constitute a separate offense.

The amendments also change an employer’s liability for benefit overpayments. Using a new “allocation of fault” standard, if the overpayment resulted from the employer’s or the DLWD’s mistake, then a claimant is not liable to repay the additional monies.

Employers should be aware of these upcoming changes to the law and consider reviewing their unemployment procedures to comply with the new requirements, especially in light of the greatly increased penalties for noncompliance.

As the law continues to evolve on these matters, please note that this article is current as of date and time of publication and may not reflect subsequent developments. The content and interpretation of the issues addressed herein is subject to change. Cole Schotz P.C. disclaims any and all liability with respect to actions taken or not taken based on any or all of the contents of this publication to the fullest extent permitted by law. This is for general informational purposes and does not constitute legal advice or create an attorney-client relationship. Do not act or refrain from acting upon the information contained in this publication without obtaining legal, financial and tax advice. For further information, please do not hesitate to reach out to your firm contact or to any of the attorneys listed in this publication.

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