Last year, Governor Phil Murphy signed into law significant changes to the state’s Unemployment Compensation Law, which took effect on July 31st, 2023.[1] Among these changes are two brand-new reporting obligations, altered deadlines for appeals, and enhanced fines for noncompliance.[2] The critical takeaway for most employers is the new reporting obligations, which now require employers operating in New Jersey to provide the New Jersey Department of Labor & Workforce Development (“NJDOL”) with separation information whenever they discharge an employee.[3] Failure to comply with this requirement may result in substantial fines for employers.[4]
The NJDOL will provide employers with a new form, that has not yet been released, specifying the information they must electronically submit when separating an employee.[5] Importantly, employers are now expected to submit separation information regardless of whether an unemployment claim for benefits is filed by the separated employee.[6] Another new reporting obligation requires employers to promptly submit the NJDOL’s Form BC-10, which is provided to the separated employee, to the NJDOL.[7] While employers have always given Form BC-10 to separated employees, they were not previously required to submit this document to the NJDOL.[8]
In addition to the reporting obligations, the law also modifies several deadlines related to the unemployment process. NJDOL’s Division of Unemployment and Temporary Disability Insurance deputies must now notify employers and obtain any missing separation information within seven days of receiving the employer’s separation information or the employee’s claim, depending on which event occurs first.[9] The NJDOL must make all initial benefits determinations within three weeks from receiving the benefits claims.[10]
The new law significantly impacts the appeals process as well. Claimants now have 21 days to appeal an initial NJDOL determination, while employers only have seven days from confirmed receipt, even if by email, to appeal.[11] Noncompliance with the reporting requirements and information submission may result in severe penalties. Under the previous law, employers faced a $25 fine for every 10 days of failure to provide benefits-related information to the NJDOL.[12] However, starting July 31st, “an employer that ‘willfully fails or refuses to furnish any reports or information,’ including separation information,” will be liable for a fine of $500 or 25 percent of any amount fraudulently withheld, whichever is greater.”[13]
To navigate these changes successfully, New Jersey employers should familiarize themselves with the new requirements in order to remain in compliance with the law. Additionally, these impacted employers should establish proper procedures to comply with the new reporting and timing obligations. It is essential for employers to keep these obligations in mind when planning reductions in force or other separations.
[1] Michael Nacchio, et al., New Jersey Employers Face Changes to Unemployment Compensation Law, SHRM (May 8, 2023), https://www.shrm.org/resourcesandtools/legal-and-compliance/state-and-local-updates/pages/new-jersey-unemployment-law.aspx [Hereinafter New Jersey Employers].
[2] Id.
[3] Id.
[4] Id.
[5] Michael R. Futterman, et al., Get Ready, New Jersey Employers- Changes to Unemployment Compensation Law Take Effect July 31, Duane Morris (July 29, 2023), https://www.duanemorris.com/alerts/get_ready_new_jersey_employers_changes_unemployment_compensation_law_take_effect_july_31_0723.html [Hereinafter Get Ready, New Jersey Employers].
[6] Id.
[7] Id.
[8] Id.
[9] New Jersey Employers, Supra Note 1.
[10] Id.
[11] Get Ready, New Jersey Employers, Supra Note 5.
[12] Id.
[13] Id.
