Update Applicable to:

Employers with employees performing work in New Jersey

What happened?

In November 2022, Governor Phil Murphy signed an amendment to the New Jersey Unemployment Compensation Law intended to streamline the benefits process. Effective July 31, 2023, New Jersey employers will be required to electronically report certain “separation information” to the NJDOL immediately after an employee is separated.

What are the details?

Previously, employers were obligated to furnish separated employees with a Form BC-10, containing instructions on how to claim unemployment benefits, upon their separation from employment. With the recent amendment, employers must now take an additional step. Regardless of the reason for the employee’s departure, they are required to promptly and simultaneously transmit a copy of the Form BC-10 to the New Jersey Department of Labor and Workforce Development (NJDOL) through electronic means.

Additionally, there is a new requirement for employers to submit a yet-to-be-issued form. This form will contain essential information requested by the Division of Unemployment Insurance (“Division”) to determine whether a departing employee qualifies for unemployment benefits. This submission is mandatory, irrespective of whether the departing employee pursues unemployment benefits. Alongside the BC-10 Form, this new document must be sent to the Division. Additionally, employers are obligated to furnish a completed copy of this new form to the departing employee as part of the process. These changes aim to streamline and enhance the administration of unemployment benefits in New Jersey.

Employers will now need to electronically report certain “separation information” to the New Jersey Department of Labor and Workforce Development (NJDOL) immediately after an employee is separated. The NJDOL has explained that the purpose of the new law is to expedite claim processing. The new law does not specify what “separation information” is required and how employers are to submit the information, and instead directed the NJDOL to issue guidance on these issues.

Before the amendment, employees who received overpayments were responsible for repaying the excess amount. The recent change has introduced a new system for distributing liability between employees and employers. Now, if a separated employee is responsible for the error leading to the overpayment, they are obligated to reimburse the Division. Conversely, if the overpayment results from an employer’s mistake, the employer’s unemployment account will bear the responsibility for the overpayment. In cases where the Division is at fault for the error, the excess payment will be deducted from the individual’s unemployment benefits the next time they are separated from a job. Importantly, after a period of four years, any outstanding overpayment is waived.

For more information, please see the links below:

Law Firm Summaries: Article 1, Article 2, Article 3, Article 4, Article 5

Vensure Previous Communication

What do employers need to do?

It’s essential for employers and individuals affected by these amendments to consult legal resources, government agencies, or legal experts to fully understand the implications and ensure compliance with the updated New Jersey Unemployment Compensation Law. The amendments are aimed at addressing various aspects of unemployment compensation in the state, and they may have an impact on how unemployment benefits are administered and how employers interact with the system.

As per the NJDOL, employers must establish an online account within the state’s Employer Access system if they haven’t done so previously. This online account will serve as a means for employers to receive email updates from the NJDOL’s Division of Unemployment Insurance.

For those employers who do not already possess an Employer Access account, they are required to enter the unique codes furnished by the NJDOL. These codes are included in their 2023 annual combined assessment bill, which is typically dispatched at the end of July 2023. Additionally, employers who lack the specific code provided on their annual combined assessment bill should select “no” when asked whether they possess the authorization code issued by the NJDOL. This process ensures that employers have access to the necessary information and communications related to unemployment insurance matters.

View this “How to Prepare” article from the Fisher Phillips law firm: Link

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