By Moira Phan, Legal Intern and Rachel H. Khedouri, Esq.
New Jersey’s Unemployment Compensation Law (“NJ UCL”) has long required employers to inform newly separated employees about the process for filing an unemployment insurance claim with the Division of Unemployment and Temporary Disability Insurance of the New Jersey Department of Labor & Workforce Development (the “Division”). When an employee terminates employment for any reason, the employer must complete Form BC-10 (“Instructions for Claiming Unemployment Benefits”) and provide it to the departing worker immediately upon separation.
In November 2022, Governor Phil Murphy signed into law amendments to the NJ UCL that will change employers’ reporting obligations upon termination of an employee. Starting July 31, 2023, in addition to giving Form BC-10 to the departing employee:
1) Employers must submit Form BC-10 to the Division.
Employers must “immediately and simultaneously” electronically submit directly to the Division a copy of the same Form BC-10 that is provided to newly separated employees.
2) Employers must submit benefit determination information to the Division.
Employers must electronically submit a new form (to be published by the Division) containing information about separated employees that will aid the Division in determining whether employees are entitled to unemployment insurance benefits. Employers must submit this new form to the Division alongside the copy of Form BC-10.
Significantly, employers must provide both Form BC-10 and the benefit determination information form to the Division regardless of whether the separated employee applies for unemployment benefits.
New Deadlines Will Apply
In addition to the new forms, new deadlines will apply at various stages of the benefit determination process as of July 31.
Currently, the Division has no set timeline for informing an employer that additional employee separation information is needed to make an initial benefit determination. Effective July 31, the Division must inform an employer about any missing employee separation information within seven (7) days of the worker’s filing of an unemployment claim or the employer’s submission of the Division’s new benefit determination information form, whichever date comes first. Upon receiving a request for missing employee separation information from the Division, employers will have seven (7) days to respond – reduced from the previous deadline of ten (10) days.
If a claim is filed and the employer previously has provided the Division with the information required upon separation, the Division immediately will electronically notify the employer of the opportunity to submit additional information in response to the benefits claim. The employer must provide this additional information within seven (7) days.
Under the amended process, the Division no longer will have the option to delay its initial determination based on employers’ failure to provide employee separation information in a timely manner. Rather, the Division must make all initial benefit determinations within three (3) weeks of receiving the separated employee’s claim for benefits without regard to the timing of the employer’s response.
The NJ UCL amendments also revise the timeline for appeal. Specifically, claimants will have twenty-one (21) days after mailing to appeal initial or subsequent benefit determinations that do not mandate the end or reduction of benefits and seven (7) days after receiving a written explanation from the Division to appeal subsequent benefit determinations that end or reduce the benefits allotted in the initial benefit determination. Employers will have seven (7) days to appeal after confirmed receipt of the Division’s notification regarding an initial or subsequent benefit determination that does not end or reduce benefits.
Increased Penalties Will Be Imposed Starting July 31, employers who fail to provide the Division with the necessary employee separation information will be responsible for the greater of a $500 fine or 25% of the amount determined to have been fraudulently withheld. Each day that the employer “willfully fails or refuses to furnish any reports or information required” by the NJ UCL (such as by failing to submit Form BC-10 to the Division) constitutes a separate offense. Further, benefit overpayments will not be corrected if the error was made because the employer failed to provide the required employee separation information.
In anticipation of the July 31st deadline, employers should consider how they will comply with the requirement to electronically submit Form BC-10 to the Division whenever an employee separates from the company. Employers also should prepare to provide additional benefit determination information to the Division upon separation of an employee. We will continue monitoring for the release of the Division’s new benefit determination information form as well as additional guidance from the Division on compliance with the NJ UCL amendments.
If you have any questions relating to these amendments or would like assistance reviewing your termination processes for compliance with the NJ UCL, please feel free to reach out to the NFC Attorney with whom you typically work or call us at 973.665.9100.