Preventive Law for Employers
Kiernan's Corner, Unemployment

Do you routinely decline to contest unemployment eligibility? Not anymore, under new NJ law

Sometimes, employers decide not to contest a departing employee’s request for unemployment compensation.  Often, employers don’t bother responding to inquries from the New Jersey Division of Unemployment and Temporary Disability Insurance because there is a severance agreement in which an employer agrees not to contest a departing employee’s request for unemployment benefits.

But ignoring the State’s requests for separation information on ex-employees is no longer a good option–if it ever was–because last year NJ adopted amendments to its laws in response to the federal  Unemployment Insurance Integrity Act.

Pursuant to the new legislation, if (1) the Division of Unemployment and Temporary Disability Insurance pays out benefits that should not have been paid because an employer failed to respond to a request from the Division for information relating to the claim, and (2) an employer has established a pattern of failing to respond to such requests (3 times, or 2% of total, whichever is more), then the Division cannot relieve the employer’s account of the erroneously charged benefit payments.  The law applies to benefit payments made on or after October 22, 2013.  NJSA 43:21-6(j).

So if your company has had a practice of not challenging or responding to unemployment claims, then you  must now consider the monetary impact of the new legislation.  New Jersey employers who repeatedly fail to respond to information requests from the Division will not have their unemployment accounts relieved of overcharges, which will affect their experience rating and cause contribution amounts to increase in future years.

Of course, whenever you do respond to information requests from the Division, be sure to answer honestly, even if providing the information could result in the employee being denied unemployment.


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Who is Ann Kiernan?

Ann Kiernan is an employment lawyer who has been practicing law in New Jersey for more than 30 years. She represents only employers and management and regularly provides management training companies big and small. Employment law is constantly changing, and Ann is familiar how these changes affect employers. To keep up-to-date and learn what issues are currently affecting businesses and employers in New Jersey, read the blog.

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