Amendments To NJ’s Unemployment Compensation Law Imposes Additional Reporting Obligations and Increased Penalties For Noncompliant Employers

Under New Jersey’s Unemployment Compensation Law, employers have long been obligated to provide separating employees with a Form BC-10 which includes instructions for claiming unemployment benefits, and to provide a reason for the employee’s termination when requested by the NJ Division of Unemployment and Temporary Disability Insurance (the “Division”).  Because employers historically ignored or were ignorant of these requirements, the State Legislature amended the Unemployment Compensation Law to include additional reporting requirements and enhanced penalties for those who continue to ignore these obligations.  These changes went into effect on July 31, 2023.

The Employer’s Reporting Obligations

Regardless of the reason for the employee’s separation, immediately upon a separation of employment the employer must:

• immediately complete a new Form BC-10 (available on the Division’s website) and provide a copy to the employee and electronically file the completed form with the Division;
• electronically report separation information needed by the Division to make an initial benefits determination (the Division is currently in the process of developing the form that must be completed for this purpose); and
• provide an email address for communications to and from the Division.

Accelerated Initial Benefits Determinations and Appeals

Although the Division still has three weeks to make an initial benefits determination, under the Amendments the Division now only has seven days to request additional information from the employer, to which the employer has seven days to respond.  In addition, following electronic receipt of an initial determination the employer’s opportunity to appeal is limited to seven days, whereas the claimant’s time to appeal is extended to 21 days after the Division sends the notice of determination to the claimant’s last known mailing address.  If an initial benefits determination is reduced or terminated on appeal, the Division must provide a written explanation for the adjustment.  The claimant will have seven days to appeal that determination and the benefits will continue to be paid as stipulated in the initial determination pending the appeal.

Increased Penalties

The amendments call for serious consequences for non-compliant employers.  An employer that willfully fails or refuses to furnish any report or information to the Division is liable for the greater of a $500 fine or 25% of the amount fraudulently withheld.  In addition, the employer may forfeit the opportunity to contest the Division’s determination.

Although it remains to be seen how aggressively the Division will enforce these penalties, employers should nonetheless update their termination procedures to ensure compliance with these new requirements.