New Jersey Unemployment Law: Understanding Employee’s Eligibility to Unemployment Benefits
New Jersey’s unemployment insurance (UI) compensation system was originally established in 1935 to provide temporary partial wage replacement to individuals who lose their jobs through no fault of their own. The UI system operates as a federal-state partnership. The federal government sets broad requirements for its administration and for the states, and also determines the details of eligibility and program operation.
To be eligible for benefits, an individual must have earned the minimum wage for at least 20 hours a week over a period of 20 weeks or at least 1,000 hours over the course of a year. Thus, for 2018 an individual must have earned at least $169 per week for 20 weeks or at least $8,500 during the base year. (A base year is defined as the first four of the last five completed calendar quarters.) The individual must also be available and able to work and be actively seeking employment. Finally, the individual must not be disqualified from benefits for any of the reasons set forth below.
In New Jersey -- as in every other state -- employees who are temporarily out of work through no fault of their own may qualify for unemployment benefits. Employees are eligible for unemployment benefits only if they are out of work through no fault of their own. This rule works differently depending on whether the employee quit, was laid off, or was fired.
Some workers, like school employees and business owners, have their own unique qualifications. If you are self-employed and do not pay for Unemployment Insurance through your paycheck, you may not be eligible for benefits. Check with the New Jersey Department of Labor & Workforce Development for more information on how to apply for unemployment benefits. https://nj.gov/labor/
An involuntary termination of employment as the result of “misconduct” will disqualify an applicant from receiving New Jersey unemployment benefits. There are two types of misconduct, which include simple misconduct and gross misconduct. New Jersey unemployment was amended on August 24, 2018 to eliminate severe misconduct as a form of disqualification.
On August 24, 2018, New Jersey has passed Bill A-3871, which amends N.J.S.A. 43:21-5 of the New Jersey Unemployment Insurance Law by eliminating the severe misconduct disqualification as well as other changes to New Jersey unemployment laws. One of the key changes in the bill is revising the definition of legal definition of what constitutes misconduct, along with modifying the misconduct disqualification period for misconduct was also changed in the new law from 7 weeks to 5 weeks. That is, a person is not eligible to receive unemployment benefits for a period of one week of the termination and the subsequent 5 weeks if determined to have committed simple misconduct in connection with their job. Once this disqualification period ends, the applicant becomes eligible to collect unemployment benefits.
Under the new unemployment law, (simple) misconduct is now defined as follows:
conduct which is improper, intentional, connected with the individual’s work, within the individual's control, not a good faith error of judgment or discretion, and is either a deliberate refusal, without good cause, to comply with the employer's lawful and reasonable rules made known to the employee or a deliberate disregard of standards of behavior the employer has a reasonable right to expect, including reasonable safety standards and reasonable standards for a workplace free of drug and substance abuse. N.J.S.A. 43:21-5(b).
In addition to the above definition for misconduct, the new unemployment law also provides for specific examples for the types of workplace conduct that would give rise to a misconduct disqualification of unemployment benefits. These examples include the following:
repeated failure, without good cause, to comply with instructions of the employer which are lawful, reasonable, and not requiring the employee to perform services beyond the scope of the employee’s customary job duties;
falsification of an employment application or other record required by the employer to determine the employee’s qualifications or suitability for the job or omitting information which created a material misrepresentation of the employee’s qualifications or suitability for the job;
tardiness without good cause which is chronic or excessive and repeated after written warnings from the employer; and
repeated unauthorized absences without good cause, such as illness or other compelling personal circumstances, or unjustified failure to provide notice prior to the unauthorized absences. An individual’s failure to meet standards regarding quality or quantity of work shall not be considered misconduct unless the employer demonstrates to the division that the standards are reasonable and that the individual deliberately performed below the standards.
Misconduct will not include an employee's advertence or ordinary negligence in isolated instances, or inefficiency or failure to perform as the result of inability or incapacity. This means that ordinary negligence in performing job duties, as opposed to intentional, malicious and deliberate conduct, is not a reason for the disqualification of a person who loses their job through no fault of their own being disqualified from receiving unemployment benefits.
This is an important clarification of the law that now makes it clear that ordinary negligence in performing job duties, as opposed to intentional, malicious and deliberate conduct, is not a basis for disqualifying a terminated employee from receiving unemployment benefits.
A simple misconduct or misconduct disqualification will prevent an applicant from receiving unemployment benefits for the week of the termination and the subsequent five weeks. Once this disqualification period ends, the applicant becomes eligible to collect unemployment benefits.
Unlike misconduct, gross misconduct is a total disqualification for unemployment benefits opposed to the 5 week disqualification penalty provided for misconduct.
The definition of gross misconduct remains unchanged with the new law and occurs when an employee is terminated for conduct connected with the work that is punishable as a crime of the first, second, third or fourth degree under the New Jersey Code of Criminal Justice.
Examples of gross misconduct include such acts like theft, assault, fraud or criminal actions taken by the employee in connection with their job.
Burden of Proof
Another significant change in the new definition of misconduct is the placing of the burden on the employer to prove that its termination of the employee was for misconduct connected to the work by requiring the employer present to the Department of Labor with written documentation at or immediately following the incident of misconduct showing that the employee’s actions meet the requirements for all forms of misconduct, including gross misconduct.
An employee who quits or resigns from a job will be eligible for benefits only if the employee resigned for "good cause." A good reason for quitting a job, such as job dissatisfaction, is not necessarily good cause. The law requires the employee's reason for leaving to be "compelling" -- that is, the worker would have suffered some sort of harm or injury by staying. Put another way, the reason the employee left must be the sort that would have made any reasonable person leave.
If an employee leaves a job because of intolerable working conditions (such as being sexually harassed) or because of being offered the opportunity to quit in lieu of being fired, allows the worker to collect unemployment benefits. Similarly, leaving a job because it poses a serious threat to the worker's health or safety is usually good cause. Additionally, two situations enable you to receive benefits when the reason for leaving was not job-related: If you left your job because of domestic violence, or because your military spouse was being relocated.
Failure to Apply or Accept New Work
To maintain your eligibility for unemployment benefits, you must be able to work, available to accept a job, and looking for employment. If you’re offered a suitable position, you must accept it. An individual is disqualified from receiving unemployment benefits for any week he or she fails, without good cause, to apply for available and suitable work or to accept available and suitable work. The disqualification period for failure to apply for or accept suitable work is for three weeks in addition to the one week waiting period.
An individual will not be denied benefits for refusing to accept suitable work unless there was a bona fide offer of work or referral to work that the individual refused. A determination of the suitability of a particular job takes into account the degree of risk to health, safety, morals, physical fitness and prior training experience, prior earnings and employee benefits, length of unemployment and prospects of finding work in the individual’s usual occupation, and the distance of the work to his residence.
For there to be a “bona fide offer or referral,” the following must be shown: 1) there was a specific job offer containing job details such as duties, rate of pay, and hours of work; and 2) the offer was made in writing or orally to the individual.
A substantial reduction in an employee’s wages constitutes good cause for leaving work under New Jersey unemployment law.
Amount and Duration of Unemployment Benefits
If you are eligible to receive unemployment, your weekly benefit rate (WBR) will be 60% of your average weekly earnings during the base period, up to a maximum of $681. This number is then multiplied by the number of weeks that you worked during the base period, up to a maximum of 26 weeks. For example, someone with a weekly benefit rate of $300 who worked for 26 weeks will be entitled to a total of $7,800 (meaning the person earned $500 per week but is entitled to 60% of $500 for a weekly benefit rate of $300 x 26 weeks=$7,800).
Unemployment Benefits Are Taxable
Two federal laws enacted in 2014 affected the federal–state Unemployment Compensation Program. Together, the two laws provide that all of a person’s unemployment compensation is to be included in gross income.
An Employer Can Challenge or Appeal a Benefits Determination
Unemployment Insurance benefits are meant for people who lose their jobs “through no fault of their own,” such as an employer’s lack of work or a layoff due to downsizing. If you voluntarily quit your job for reasons that were not work-related, or you were terminated for misconduct, your eligibility will need to be reviewed. A representative from our division (a claims examiner) will conduct a fact-finding interview by either phone or email to determine whether you are eligible for Unemployment Insurance benefits. Your employer(s) may also be requested to participate. The claims examiner will review the facts that you and your employer(s) provide, and determine your eligibility based on the law.
The unemployment compensation law provides a mechanism for employers to appeal determinations or decisions of the Division of Unemployment Insurance. The appeals process has two administrative levels: the Appeals Tribunal and the Board of Review. Decisions of the Board of Review may be appealed to the Appellate Division of the Superior Court.
A determination becomes final unless a written appeal is filed within seven calendar days after delivery or within 10 calendar days after the mailing of the determination. An appeal period can be extended if good cause for late filing is shown. Good cause exists in situations where it can be shown that the delay was due to circumstances beyond the individual’s control that could not reasonably have been foreseen or prevented.
To file an appeal, you must mail or fax your appeal to:
New Jersey Department of Labor and Workforce Development
PO Box 907
Trenton, NJ 08625-0907
This information should not be construed as constituting specific legal advice. It is intended to provide general information about this subject and general compliance strategies. For specific legal advice, we strongly recommend that you with an attorney. At this time, Burnham Douglass is accepting representation of individuals/entity regarding Unemployment Claims only in connection to our representation of that individual/entity for other employment matters.