As you know we provide client alerts for all significant changes and updates in laws that impact your business.  Beginning tomorrow, there are changes in the requirements that New Jersey employers need to deal with claims for Unemployment Insurance benefits. In fact, employers will be obligated to submit termination information even if the employee does not apply for benefits. Yes, that’s right even if the employee doesn’t apply for benefits. So here’s how it works.

You know even before the new law, anytime an employee leaves, whether voluntarily or involuntarily, you must give them a Form BC-10 describing how they can apply for Unemployment Insurance (UI) benefits. In addition to continuing that process, the new law requires employers to submit electronically, to the Department of Labor, the BC-10, immediately and simultaneously with the separation. Any minute now, DOL is also supposed to provide employers with a new form to be used for explaining the reason for separation and that form must also be submitted to DOL immediately and simultaneously. As is typical, although employers must rush to submit these forms, the state hasn’t quite gotten around to publishing the new separation information form.

Here’s our real concern: the law also requires the DOL to give your former employees copies of the separation information that you write, and an opportunity to respond, before the initial determination. The law changes the deadlines for DOL too. After receipt of the BC-10 and the new form with separation information, DOL has 7 days to request additional separation information. The legislation now gives DOL 3 weeks, up from 2, to make initial determinations.  And  . . . . your former employees will now have 21 days to appeal Unemployment benefit determinations while employers will have only 7 days to appeal.

Here’s what makes this law even more of a problem. We know how some employers just ignore the request for separation information because they know that if they tell the truth the former employee may fight back and/or get a lawyer. And that might lead to a hearing and maybe a lawsuit because the former employee is being squeezed financially and hasn’t gotten around to looking for a new job. We of course would never advise our clients to ignore any such inquiry from a state agency, but now it can cost you big if you sit back and do nothing.

Failure to provide separation information will result in a fine of $500 or 25% of the amount the former employee should have received in benefits for each offense. And guess what? Every day that you fail to disclose the separation information is a separate offense. Yup, that means $500 a day!

If you have any upcoming terminations, please don’t hesitate to ask us for help.  The new law is confusing and concerning.