TRENTON – Legislation sponsored by Senate Labor Committee Chairman Fred H. Madden and Senator Jim Beach to streamline the process businesses use to pay into the unemployment insurance system, in order to safeguard benefits for New Jersey’s unemployed, was approved today by the Senate Budget and Appropriations Committee.
The bill (S2415) would implement a recommendation made by the state Auditor in 2013 after an audit found that some businesses were sending unemployment compensation payments to the Department of Labor instead of the Department of Treasury. Those payments, in some cases, were then being hand delivered to Treasury, increasing the risk of lost payments.
“The audit exposed vulnerabilities within the system that increased the potential for theft or loss of funds. Clearly, we should have a better system for processing payments than hand-delivering checks from one state department to another,” said Senator Madden (D-Gloucester/Camden). “Requiring that payments are sent directly to the appropriate department will safeguard the funding that New Jersey’s unemployed rely on to make ends meet. At the same time, it will remove any confusion about the process for businesses.”
As part of its review of the Department of Labor and Workforce Development (DLWD), the State Auditor performed cash counts on three separate dates and counted checks on hand totaling over $525,000. Noting that the continuing practice of sending some checks to the DLWD is lengthy and opens up the possibility for error, the State Auditor recommended that all unemployment payments be submitted electronically or sent directly to the Division of Revenue. The bill (S2415) would implement that recommendation, by clarifying that all payments, reports and receipts from employers related to the unemployment compensation program must be submitted directly to the Division of Revenue in the Department of the Treasury.
“The audit found disturbing instances of checks intended for the UI fund being hand delivered to the Treasury Department, increasing the risk for impropriety. It makes no sense to move hundreds of thousands of dollars between state departments through a courier system, especially when the transaction process can be improved significantly through minor adjustments,” said SenatorBeach (D-Camden). “This bill will clarify that all payments to the UI fund must go directly to Treasury, removing the risk that money could get lost in the shuffle.”
The committee approved the bill by a vote of 13-0. It next heads to the full Senate for a vote.