NJBIA and other business groups said Friday proposed changes to the state’s unemployment insurance program will place significant administrative burdens on employers by requiring them to submit comprehensive details about all employee separations – even those workers who are ineligible for jobless benefits because they quit to take another job.
In comments submitted to the Department of Labor and Workforce Development (DOL), the NJBIA, the National Federation of Independent Business and the New Jersey Chamber of Commerce said the proposed rule change could “negatively impact the affordability of conducting business in New Jersey” and is “materially more burdensome than those required by any other state.”
Currently, employers must give workers who are leaving the company a DOL form that explains the procedure for filing an unemployment insurance claim. If that former employee files a claim, the business is then asked to provide DOL with the former worker’s employment and separation information so the state can determine eligibility for unemployment benefits.
Generally, only employees who are laid off or fired through no fault of their own (as opposed to quitting voluntarily or being fired for cause) are entitled to jobless benefits.
However, under the proposed rule, employers would have just one day to provide the state with a “comprehensive statement of facts” about every worker who leaves the company, regardless of whether the employee ever files for unemployment benefits.
“In practice, a material percentage of the New Jersey workforce does not file a claim for UI benefits following a separation from employment,” the business groups wrote. “Those workers may have already secured new employment or may have separated for personal reasons that would not qualify them to receive UI benefits.”
The proposed rule change also does not adequately consider the fact that many businesses rely on third-party UI administrators (TPAs) to meet their UI obligations, the business groups said.
“These TPAs perform a critical function: ensuring the smooth flow of timely and accurate information to and from each state’s UI agency and client employers,” the business groups said. “We are concerned that the Division has not substantively engaged with the TPA community to the extent the Proposed Amendments and Rule will impact client employers.”
The rules also do not adequately define what is meant by a “comprehensive statement of facts surrounding the separation from work.”
“For example, the Division could specify that it considers the employer’s providing the reason for separation (e.g. voluntary quit, violation of policy, job abandonment) as compliant with this requirement. If the Division instead requires employers to provide detailed, employee-specific termination documentation for each separating employee—within one business day of that employee’s termination—that would be an unprecedented and time-sensitive burden that does not to our knowledge apply to employers in any other state or jurisdiction,” the business groups wrote.
“We also encourage the Division to ensure that its process allows employers to upload information for multiple employees simultaneously, using a standardized electronic format,” the business groups said. “Otherwise, employers will be forced to resort to 1-by-1 manual entry into the Division’s online system.”
