Labor Day Blues Come Early in New Jersey – Amendments to State's Unemployment Compensation Law Impose New Reporting Requirements

Written By: Kenneth A. Rosenberg and Brian J. Frederick
Fox Rothschild LLP

New Jersey’s new amendments to its Unemployment Compensation Law, (UCL) which became effective July 31, 2023,[1] will impose significant and onerous reporting requirements on employers upon the separation of an employee and provide for enhanced penalties for noncompliance.

The recent amendments to the UCL are reportedly designed to increase the state’s unemployment insurance system’s efficiency and expedite the payments of benefits, as well as to ensure a timely and transparent process. The law was passed after the height of the pandemic where billions of dollars in benefits were distributed to over 2 million workers. The amendments are a retroactive response to the processing delays and wait times experienced during the pandemic and aim to accelerate the process moving forward.

New Reporting Requirements

Pursuant to the new UCL amendments, employers are now required, in addition to providing a completed Form BC-10 to separated employees, to immediately and simultaneously provide the form to the New Jersey Department of Labor and Workforce Development (NJDOL) by electronic means.[2] This is a significant departure from the prior requirement, which tasked employers only with providing each individual at the time they became unemployed, for any reason, whether the unemployment is permanent or temporary, a printed copy of Form BC-10.

Further, the NJDOL will be providing employers with additional directions concerning information that employers will be required to provide to the NJDOL, via electronic means, immediately upon the separation of an employee to enable the division to make a benefit determination. At this time, the NJDOL has not issued further guidance on the additional separation information that will be required to be supplied by employers. However, it appears that employers, upon the separation of an employee for any reason, will be required to immediately electronically submit to the NJDOL a completed Form BC-10 along with the additionally required separation information, regardless of whether the separated employee files a claim for benefits. The scope and burden of the additionally required submissions immediately upon separation remains to be seen. Nevertheless, it will undoubtedly be more burdensome than simply supplying a completed Form BC-10 to the separated employee.

The amendments further require that each employer provide the NJDOL with an email address for communications to and from the division. 

At this time, the NJDOL acknowledges that the infrastructure to support the new electronic reporting requirements is still being developed.  As such, employers will need to carefully monitor the NJDOL’s website for new developments in electronic reporting capabilities to ensure timely compliance with the UCL amendments. While electronic reporting may not yet be available, the NJDOL provides that, for employers who have not done so already, an account with Employer Access should be created as soon as possible as a first step in complying with the new requirements. 

Enhanced Penalties

The UCL amendments also increased the penalties for failure to submit required information to the NJDOL pursuant to N.J.S.A. 43:21-6. Previously, employers were subject to a $25 penalty for every 10 days the employer failed to submit required information. Under the new amendments, employers that fail to immediately and simultaneously provide the requisite disclosures are subject to a fine of $500, or 25% of any amount fraudulently withheld, whichever is greater.[3] Moreover, each false statement or representation or failure to disclose a material fact, and each day of such failure or refusal, constitutes a separate offense. As such, employers face significantly increased liability if they fail to comply with the UCL’s reporting requirements.

Other Notable Amendments to the UCL

In addition to the above revisions to the UCL, the new amendments further provide that:

• A representative of the NJDOL will examine any disclosures made pursuant to the new reporting requirements and notify the employer within seven days of receipt of the employer’s disclosures, or seven days after the filing of a claim for benefits, whichever occurs first. The NJDOL representative will then require the employer to electronically submit within seven days after notice any information required by the UCL which the employer failed to provide as may be necessary to determine the claimant’s eligibility for benefits.
• If a claim is filed by a separated employee and the employer has provided all of the separation information to the NJDOL required under the statute, the NJDOL will notify the employer and the employer will have the opportunity to electronically submit, within seven days, any additional information in response to the employee’s claim for benefits.
• The NJDOL will have three weeks to make an initial determination upon the receipt of all necessary information. This amends a prior provision of the UCL which provided that the NJDOL would have an additional two weeks to obtain missing information if an initial determination could not be made due to a lack of documentation.
• Employers will have seven days to appeal an initial determination by the NJDOL, and claimants will now have 21 days to file their response.
  • Notably, with respect to regular Unemployment Compensation, if an employer appeals the charging of benefits to its account after the seven-day period to appeal the initial determination, and, as a result the NJDOL reduces the amount charged to the employer’s account, any amounts paid to the claimant before the resolution of the appeal will be regarded as an overpayment caused by the employer’s error and will be charged to the employer’s account. The claimant will not be responsible to repay any such overpayment.

Given the foregoing amendments to the UCL, including new reporting requirements and enhanced penalties for non-compliance, employers should immediately review their separation procedures and be prepared to comply with the forthcoming electronic reporting requirements. Additionally, while employers wait for the NJDOL’s portal to become operational, they should create Employer Access accounts with the NJDOL and continue to provide written hard copies of the completed Form BC-10’s to employees that are separated for any reason.
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Employers that have questions regarding their new UCL obligations should seek the assistance of an experienced labor and employment attorney who is familiar with these requirements to avoid the risks of non-compliance, because failing to comply may be very costly.

For more information, please contact Kenneth A. Rosenberg at [email protected] or 973-994-7510 or Brian J. Frederick at [email protected] or 973-548-3398 or any member of Fox Rothschild’s Labor & Employment Department.