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State Seal

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

TRENTON — Three bills sponsored by Senators Fred H. Madden, Nicholas Scutari, Joseph F. Vitale and Jim Beach to make common sense changes to the unemployment insurance laws in New Jersey and safeguard benefits for the unemployed have been signed into law.

“New Jersey residents depend on our unemployment insurance system to support their families when they find themselves out of work. It is imperative that we safeguard the benefits provided under this program. However, we also must ensure that our laws meet the needs of those who have paid into the system and rely on the benefits as a lifeline. These new laws are a major step forward in that effort,” said Senator Madden, (D-Camden, Gloucester) chairman of the Senate Labor Committee.

Sponsored by Senator Madden and Senator Nicholas Scutari, the first law (S2082) will make certain employees eligible for unemployment benefits if they are laid off soon after taking a new job. Previous law disqualified any worker who voluntarily left 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 law makes 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.

“Unemployed residents who are victims of circumstances out of their control should not be excluded from the benefits they deserve,” said Senator Madden. “The state’s Unemployment Insurance Trust Fund’s benefits must be made available to those who have paid their due into the system, including those who have left their current jobs to seek out better opportunities, only to be quickly laid off. This law will address this exclusion by recognizing and providing benefits to residents in these unique situations.”

“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 law, (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 was 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.

“When it comes to payments to the Unemployment Trust Fund, fairness should be across the board for all employers,” said Senator Madden. “It is not right to place financial pressure on employers just because other companies fail to make the required contributions. This common sense law ensures that state vendors pay the required amount just like their counterparts.”

“Businesses must take responsibility and pay their debt,” said Senator Vitale (D-Middlesex). “We have found an unfair pattern of state vendors missing millions of dollars in payments to the state UI system. Companies that hold state contracts paid for by taxpayers must equally pay their share of contributions as required by state law.”

The third law (S2414), sponsored by Senator Madden and SenatorBeach, requires 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 will 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.

“These critical improvements will strengthen the system and help reduce the risk of errors, fraud, misuse, or theft of unemployment funds,” said Senator Madden. “By doing this, we will help the UI system remain solvent and safeguard the funding that New Jersey’s unemployed rely upon to make ends meet.”

“With this law, we will ensure that access rights to the UI system are consistently monitored,” said SenatorBeach (D-Camden). “This will improve the security of the state’s processing and claims operation and protect the funding that families depend on in their greatest time of need.”

The three laws take effect immediately.