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Unemployment Insurance: New Jersey

Unemployment Insurance requirements for other states

Federal law and guidance on this subject should be reviewed together with this section.

Author: John Sarno, Employer's Association of New Jersey

Summary

  • Unemployment insurance is a program created to provide partial wage replacement to unemployed workers while they conduct an active search for work. See Unemployment Compensation.
  • Unemployment insurance is a joint federal-state program based on federal law and executed through state law. See Unemployment Compensation.
  • Unemployment benefits will generally last for up to 26 weeks. See Benefits.
  • New Jersey has some unique eligibility criteria and claimants must meet certain requirements in order to be eligible for unemployment benefits. See Eligibility.
  • Employers must follow certain recordkeeping and posting requirements under the unemployment compensation law. See Recordkeeping; Posting.

Unemployment Compensation

Unemployment Insurance (UI) is a legally required benefit, and most New Jersey employers that have paid $1,000 or more in wages in the preceding or current calendar year are subject to New Jersey's Unemployment Compensation Law.

The New Jersey UI system is funded by payroll tax contributions from both the employer and the employee.

Employer contribution rates may vary based upon the claims experience of the employer or whether the employer is a new employer.

In some circumstances, an employer may not be subject to unemployment taxes and unemployment insurance is not available to its employees.

Types of workers not eligible for New Jersey unemployment compensation include:

  • Self-employed workers;
  • Railroad employees;
  • A relative employed by a child or spouse;
  • A minor employed by a parent;
  • Students working for the school at which they are studying or in a work-study program; and
  • Real estate agents and insurance agents who work only for commission.

N.J. Stat. § 43:21-1 - N.J. Stat. § 43:21-24.30.

Benefits

In general, New Jersey unemployment benefits last a maximum of 26 weeks. + N.J. Stat. § 43:21-3.

In periods of high unemployment the 26 weeks may be increased, depending on the unemployment rate in the state.

Eligibility

In order to be eligible for UI benefits, an individual must:

  • Have worked at least 20 base weeks of employment during a base year; or
  • Earned a certain amount set by the state in a base year from all employers.

+ N.J. Stat. § 43:21-4.

The definition of base week provides that if an employee is laid off or furloughed because the employer's operations were affected by a state of emergency, then the weeks an employee is separated from employment, up to a maximum of 13 weeks, count as a base week for the purpose of determining eligibility for unemployment benefits. These weeks will not, however, count as a base week for the purpose of determining the average weekly wage.

A base year is the first four of the last five completed calendar quarters before the employee files an unemployment claim.

In general, UI provides unemployment compensation benefits to eligible workers who are unemployed through no fault of their own.

Unemployment benefits will only be paid to those unemployed claimants who meet the following requirements:

  • The individual has made a claim for benefits.
  • The individual has registered for work at, and continues to report to, an unemployment office.
  • The individual is able to work, is available for work and is actively seeking work. This means able to perform some kind of work, not necessarily his or her customary work.
  • The individual has been unemployed and has satisfied a waiting period of one week, which may be compensable.
  • The individual has received wages for a sufficient period of time and for sufficient wages.
  • The individual's employment was for services not specifically excluded by New Jersey's Unemployment Compensation Law.
  • The individual is not disqualified in accordance with other provisions of the law.

An individual who is unable to work because of a non-occupational accident or sickness which occurred more than 14 days after his or her last day of work and which results in total disability may be entitled to unemployment disability benefits if the disability is not covered under New Jersey's temporary disability benefits (TDB) program or by Workers' Compensation. +N.J.Stat. 43:21-4(f).

Disqualification of Unemployment Benefits

Under New Jersey Unemployment Compensation Law, individuals may be disqualified from receiving unemployment benefits for any of the following reasons.

  1. Leaving work voluntarily without good cause attributable to the work or the employer (e.g., lack of transportation, childcare issues, voluntary relocation, incarceration, and in some cases, loss of a required license, including a drivers' license, needed to perform a job). See Special Circumstances;
  2. Being terminated or suspended for misconduct connected with the work;
  3. Failing to apply for or accept suitable work without good cause.
  4. Receiving payment instead of notice, including payments under a collective bargaining agreement, but not including severance payments;
  5. Seeking or receiving unemployment benefits from another state;
  6. Separating from employment due to a labor dispute (in certain circumstances);
  7. Unlawfully receiving benefits due to fraudulent representation; and
  8. Attending school, unless an individual has earned sufficient wages while in school or is attending a training program approved by the state to improve employment opportunities.

+N.J. Stat. § 43:21-5.

Misconduct is conduct that is improper, intentional, connected with an individual's work, within an individual's control and not a good-faith error of judgment or discretion and is either:

  • A deliberate refusal, without good cause, to comply with an employer's lawful and reasonable rules that were made known to the employee; or
  • A deliberate disregard of standards of behavior the employer has a reasonable right to expect (e.g., reasonable safety standards and reasonable standards for a workplace free of drug and substance abuse).

Gross misconduct is an act that may be punishable as a crime of the first, second, third or fourth degree under the state Code of Criminal Justice.

An employer has the burden of proof to sustain disqualification from unemployment benefits because of misconduct. Prior to any determination by the Department of Labor and Workforce Development that misconduct occurred, an employer must provide written documentation demonstrating that the employee's actions constitute misconduct or gross misconduct.

Special Circumstances

In general, UI benefits will not be denied if an individual voluntarily leaves work due to:

  • Unsafe, unhealthful or dangerous working conditions;
  • A disability that has a work-connected origin and there is no other suitable work that the employee can perform within the limits of the disability;
  • A physical or mental condition or state of health that does not have a work-connected origin but is aggravated by working conditions and there is no other suitable work that the employee can perform within the limits of the disability;
  • Imminent layoff or termination within 60 days;
  • Circumstances directly resulting from the individual being a victim of domestic violence; and
  • Accompanying a spouse or civil union partner who is an active member of the US Armed Forces to a new place of residence outside the state due to the servicemember's transfer to a new assignment.

The New Jersey Supreme Court clarified that, in order to prove there is no other suitable work available that an employee can perform within the limits of his or her disability, the law does not specifically require the employee to notify the employer of his or her medical condition and to request an accommodation. Instead, an "individualized determination" must be made. In some cases, an employee can demonstrate the unavailability of other suitable work by showing evidence of the medical condition combined with:

  • Evidence of the job's physical demands;
  • The small size of the workplace; or
  • Other relevant factors.

See Ardan v. Board of Review, +2018 N.J. LEXIS 123 (NJ Sup. Ct. 2018).

Filing Claims

When an individual files a claim for unemployment insurance benefits, that individual's last employer and other employers related to the claim are mailed a Form BC-3E, Notice to Employer of Monetary Determination. This notice contains the claimant's name, Social Security Number and the potential benefit charge to the employer's unemployment insurance account.

If a worker is separated for reasons other than lack of work, the employer has an opportunity to provide information concerning the separation that will be used to determine the individual's eligibility for benefits.

Based on information received from the employer and the employee, a claims examiner makes an initial determination as to whether a claimant is eligible for unemployment compensation. The determination is final unless either party timely contests the determination.

Recordkeeping

An employer is required to provide Form BC-10 to each employee at the time of separation.

Additionally, an employer must maintain the following records for the current calendar year and the four preceding calendar years:

  • For each employee for each pay period, the amount of total remuneration, showing commissions, bonuses and gratuities separately;
  • Each employee's date of return to work after temporary layoff, and date and reason for termination, and number of base weeks of employment; and
  • The employee's Social Security Number.

Posting

A covered employer must conspicuously post an unemployment compensation and temporary disability benefits notice to employees.

Future Developments

There are no developments to report at this time. Continue to check XpertHR regularly for the latest information on this and other topics.