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Senator Fred H. Madden, D-Gloucester and Camden, addresses the Senate on the Senate Floor

Madden, Scutari, Vitale, Beach Bills Would Make Common Sense Changes to UI Laws, Safeguard Benefits

TRENTON — Three bills sponsored by Senators Fred Madden, Nicholas Scutari, Joseph F. Vitale and Jim Beach that would make common sense changes to the unemployment insurance laws in New Jersey and safeguard benefits for the unemployed received unanimous approval today in the Assembly. Two of the bills were sent to the governor’s desk.

“Our residents depend on our unemployment insurance system to support their families when they find themselves out of work. We not only have to safeguard the benefits provided under this critical program, but we must ensure that our laws best meet the needs of those who have paid into the system and rely on the benefits as a lifeline in their greatest time of need. These bills are a huge step forward in that effort,” said Senator Madden, chairman of the Senate Labor Committee.

Sponsored by Senator Madden and Senator Nicholas Scutari, the first bill (S2082) would make certain employees eligible for unemployment benefits if they are laid off soon after taking a new job. Current law disqualifies any worker who voluntarily leaves a job from receiving unemployment benefits. In order to receive benefits a worker who voluntarily quits is required to become reemployed and work at least eight weeks, earning at least 10 times the worker’s weekly unemployment benefit rate, in order to become eligible for unemployment benefits. The bill would make an exception to that requirement for a worker who leaves one job to accept a subsequent job at least equal in hours or pay, but is laid off from the subsequent job through no fault of their own.  The unemployment benefit laws of 26 states, and the regulations of five other states, treat accepting other work as good cause for leaving work, and do not disqualify workers from benefits for doing so.

“Residents who have paid unemployment taxes over time expect to have the insurance available to them if they become unemployed. Unfortunately, our laws prevent many workers who take a new job, and are subsequently laid off, from eligibility,” said Madden (D-Gloucester/Camden). “We have to create a fairer process to ensure that families get the benefits they deserve. This legislation will do that.”

“Workers who leave a job to take a new opportunity should not be penalized if they are laid off due to business conditions that are out of their control,” said Senator Scutari (D-Union, Middlesex, Somerset). “More than half of the states in the nation already treat accepting a new job as good cause for leaving a previous one. By updating our laws, we will better protect our residents at a time when they are already facing financial distress.”

The second bill, (S-1622) sponsored by Madden and Senator Joseph F. Vitale, requires the state to withhold payments from delinquent vendors who fail to contribute to the Unemployment Insurance Trust Fund or the State disability benefits fund (SDBF) through unemployment and disability taxes. The bill is in response to a state audit of the unemployment fund that found at least 170 state vendors owed $36.7 million in unpaid unemployment compensation contributions to the fund as of June of 2013. Meanwhile, these same companies received at least $111.3 million in payments from state contracts during the 2011 and 2012 fiscal years, the audit found.

“This is about fairness. When employers fail to make the required contributions it puts financial pressure on other employers to make up the difference, especially in tough economic times. This bill closes a loophole and ensures that state vendors are up to date with their payments into the funds that provide benefits to our workers,” said Madden.

“Businesses that hold state contracts paid for by taxpayers have to play by the rules that are set up for companies in New Jersey,” said Senator Vitale (D-Middlesex). “Unfortunately, past audits have found that state vendors missed millions of dollars in payments into the state UI system. These companies must be held accountable, and this bill will ensure that happens.”

The third bill (S2414), sponsored by Senator Madden and Senator Beach, would require the Department of Labor to establish a procedure for the quarterly review of personnel access rights to the department’s primary system for unemployment claims receipt and processing. The procedure would have to include an evaluation of employee access to the system and the adjustment, addition, or deletion of access rights based on the review. Highlighting the importance of this change is the April 2014 theft conviction of a DOLWD unemployment insurance clerk who was found to have stolen $21,055 in unemployment benefits between June and September of 2013. The employee used her position to access the system and redirect benefit money from individual claimants into her personal bank account.

 “The audit highlighted a flaw within the system that left it vulnerable to the loss of funds,” said Senator Madden. “With this oversight measure, we will reduce the risk of errors, fraud, misuse, or unauthorized alteration of claims and payments from the fund. Not only will this improve the integrity of the UI system, but will better protect benefits that residents need to take care of themselves and their families.”

 “Implementing a process for regular review of access rights to the unemployment system just makes sense,” said Senator Beach (D-Camden). “Particularly given the importance of these benefits to families around the state, this additional step will help to guard against unauthorized access and the potential for lost funds, whether through intentional means or the result of an innocent mistake.”

 With today’s approval by the Assembly, S2082 and S2414 head to the governor’s desk. S1622 heads back to the Senate for a final vote before going to the governor’s desk.