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The Senate Labor Committee today voted to exclude unemployment benefits paid during the pandemic from the calculation of employer contributions to the state unemployment insurance system. NJBIA testified in favor of the bill.

The legislation, S-2504 (Ruiz, D-29), would protect businesses from having to pay higher rates for unemployment insurance because their businesses were shut down by the governor to prevent the spread of coronavirus. The bill also would exempt nonprofit organizations and governmental entities or instrumentalities which elect to make payments in lieu of contributions from liability for payments made during the state of emergency.

“This bill would provide some relief for our businesses and nonprofit organizations that are facing a long, painful road toward economic recovery,” said NJBIA Vice President for Government Affairs Ray Cantor. “Without this legislation, the formula would penalize thousands of organizations that have been devastated economically on top of everything else the pandemic has caused.”

Calculations for how much a business pays for unemployment insurance take into account how many layoffs it has had in the past, with those with a lot of layoffs paying more. Coronavirus, however, is unprecedented, and these layoffs were all but unavoidable once the government ordered nonessential businesses to close to protect public health.

Since the pandemic began in March, the New Jersey Department of Labor and Workforce Development has paid out over $13 billion in unemployment benefits to nearly 1.5 million New Jersey workers.