In November 2022, Governor Phil Murphy approved significant amendments to New Jersey’s Unemployment Compensation Law (“UCL”). The amended law can be found here. These changes will become effective on July 31, 2023.
The law has required an employer to complete and provide a separated employee with the New Jersey Department of Labor & Workforce Development’s (“NJDOL”) Form BC-10, which contains instructions for claiming unemployment benefits and information about the employer that the worker needs to file a claim. Under the new amendments to the law, employers are now required to send the NJDOL simultaneously: (1) the same completed Form BC-10 that was given to the employee, and (2) another new form that the NJDOL will create to provide the state with sufficient information to make a benefit determination. It is also important to note that all communications between employers and the NJDOL will be conducted electronically.
Below is a more detailed description of the changes:
- When an employee separates from their employer, the employer must provide the NJDOL and the separated employee with specific information concerning the employee’s employment separation. Such information will be listed in a new electronic form, which the NJDOL will provide. This form must be submitted to the NDOL whether or not the separated employee filed a claim for unemployment benefits. It is important to note the DOL has not yet made this form available.
- An employer must now “immediately and simultaneously” electronically send a copy of the Form BC-10 to the NJDOL when it provides the Form to the separated employee.
- To be able to send the above forms electronically and also receive communications from the NJDOL, employers are required to establish an account with Employee Access as soon as possible. Instructions on creating such an account can be found on the NJDOL’s website. Employers must use the code received on the 2023 Annual Combined Assessment Bill. No further action is required at this time for employers who already have an established Employer Access account.
- Employers must be notified by the NJDOL of missing information within seven days of the employee’s unemployment insurance claim or the employer’s submission of the new separation information form, whichever occurs first.
- If an unemployment insurance claim is filed and the employer has submitted the required separation information, the NJDOL will immediately send an electronic notification to the employer to give it the opportunity to submit electronically, within seven calendar days, any additional information in response to the claim for benefits.
- If the employer does not submit the separation information within seven days of receiving the electronic notice or request, the NJDOL will make a determination based on any available evidence.
- An initial benefit determination will be made by the NJDOL within three weeks of receiving a claim for benefits.
- An employer that does not submit the required separation information to the NJDOL in a timely manner will not be permitted to retroactively contest a benefits determination. Such an employer would be able to contest only the benefits determination for workweeks that occur after the NJDOL receives the separation information.
- Claimants will now have up to 21 days to appeal an initial NJDOL determination and seven days to appeal a subsequent determination.
- Employers will now have up to seven days after confirmed receipt of notice of an initial determination to file an appeal.
Penalties and Liability for Overpayment
- An employer that "willfully fails or refuses to furnish any reports or information … including separation information" is liable for a $500 fine or 25 percent of the "amount fraudulently withheld." Furthermore, any employer who knowingly makes a false statement or misrepresentation or knowingly fails to disclose a material fact to avoid or reduce the payment of unemployment benefits will be subject to the penalty. Notably, "each such false statement or representation or failure to disclose a material fact, and each day of such failure or refusal, shall constitute a separate offense."
- Under the new amendments, overpayment liability is now determined on an “allocation of fault” basis. As such, if a claimant received an overpayment due to the NJDOL or employer’s fault, the claimant is not liable for repayment. Erroneous payments will not be corrected if the payment was made because the employer failed to provide the required separation information. If the claimant is responsible for the overpayment, then the claimant must pay the NJDOL back. Lastly, If the NJDOL is responsible for the error, the overpayment will be deducted from the claimant’s unemployment benefits on the next occasion the employee is separated from a job—however, after four years, the overpayment is waived.
Substantial changes have been made to the UCL. It is important for employers to review their employment practices and policies to ensure they adhere to UCL’s new requirements. Additionally, employers should regularly check the NJDOL’s website for the division’s release of its new form requiring employee separation information.
Connell Foley will continue to keep you updated on any new guidance released by the NJDOL regarding the UCL. Please contact us if you have any questions or need our assistance.