New Jersey has joined a growing list of states enacting changes to their unemployment insurance laws to comply with an upcoming federal deadline. Starting October 22, 2013, New Jersey will refuse to relieve an employer’s account of charges for erroneous benefit payments if (1) the payments were made because the employer failed to timely respond to requests for information from the New Jersey Division of Labor and Workforce Development (Division), and (2) the employer has a pattern of failing to respond to such requests.
This change, unanimously approved by the state Senate and Assembly and signed by Governor Chris Christie on August 19, 2013, brings New Jersey’s unemployment insurance statute into compliance with Section 252 of the federal Trade Adjustment Assistance Extension Act of 2011. The federal legislation set an October 21, 2013 deadline for states to conform their unemployment compensation laws to prohibit relieving an employer’s account of erroneous benefit payments caused by failures to respond to requests for information.
The New Jersey statute does provide some protections for employers. For example, the new prohibition will be triggered only where there is a demonstrated pattern of failing to respond to Division inquiries. By contrast, guidance from the U.S. Department of Labor authorizes states to penalize employers without evidence of a pattern of non-responsiveness. The new law also makes clear that no pattern of non-responsiveness exists unless the employer has either ignored at least three requests for information in the preceding 365 days, “or if the number of failures is less than 2 percent of the number of requests from the Division, whichever is greater.” Finally, the new law preserves the right of employers to use the current appellate process to appeal a Division determination that relief is prohibited.
With the October deadline fast-approaching and the considerable leeway given to states when enacting Section 252-compliant statutes, employers should take steps now to develop a process by which they can respond promptly to unemployment insurance information requests from state officials.