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State also moving to eliminate checks, provide direct deposit

The state Department of Labor is proposing to change New Jersey's unemployment insurance (UI) system in an attempt to modify and strengthen several unemployment insurance eligibility rules for workers.

The proposed regulations, which will be published in the Nov. 15 edition of the New Jersey Register, are part of the Christie administration's effort, signed into law on July 2, that provides changes to unemployment insurance eligibility, while attempting to minimizing the tax impact on businesses, and setting a path for the Unemployment Insurance Trust Fund's return to solvency.

A key provision changes unemployment insurance eligibility for workers who are fired for misconduct or who voluntarily quit their jobs. The proposed eligibility requirements are more stringent, particularly for workers fired for severe misconduct. A three-tiered structure is established — simple misconduct, severe misconduct and gross misconduct — which either prohibits payment of unemployment benefits or extends the waiting period before benefits can be paid. The proposed misconduct rules affecting employees who lose their jobs due to misconduct will result in estimated annual savings of between $150 and $175 million, a savings seen as significantly helping to restore the Trust Fund's solvency over time.

During the comment period, the Labor Department will conduct a public hearing on the proposed rules on Dec. 17, from 10:00 a.m. to noon in the 13th floor Auditorium of the Labor Building at John Fitch Plaza in Trenton.

Commissioner Harold Wirths said, "The rulemaking process is another step in our ongoing commitment to reform our state's UI system to ensure long-term fund solvency while protecting the economic interests of New Jersey's employers and workers."

The legislation signed by Gov. Chris Christie also lessened the financial hardship of a UI payroll tax increase by holding the increase to a single column in fiscal y 2011-12, rather than allowing a move to the column with the highest tax rates, which is what would have happened had the governor and the Legislature not acted. As a result, rather than an average wage tax increase of more than $400 per worker, employers saw an average increase estimated at $130 per employee.

The Labor Department also is attempting to modernizing the process through which UI benefits are delivered to claimants, by moving to electronic delivery of benefits through direct deposit into bank accounts or debit cards. Wirths said the department will be able to deliver funds to UI claimants faster, more securely and in a more user-friendly way. Eliminating antiquated paper checks by spring 2011 could reduce printing and mailing costs by an estimated $7 to $8 million annually.

The Unemployment Insurance Task Force created under the law is studying and assessing the current unemployment insurance situation and will recommend additional ways in which the state can restore the trust fund to solvency while balancing the interests of workers, employers and the impact on the overall economy. The task force will make its recommendations before the end of the year.

— TOM HESTER SR., NEWJERSEYNEWSROOM.COM