(TRENTON) – Legislation Assemblyman Wayne DeAngelo sponsored to better protect the state’s Unemployment Insurance Fund from fraud and ensure it’s used only by those it was created to assist – unemployed New Jerseyans – was advanced Thursday by the Assembly Labor Committee.
“Out-of-work New Jerseyans deserve this help, and every taxpayer deserves to know the benefits system they pay into is protected as best as possible from fraud that, in the end, only costs everyone more money,” said DeAngelo (D-Mercer/Middlesex). “The unemployment fund exists to help New Jerseyans get back on their feet as they find work, and it should be protected for their use and their use only. With these few steps, we can better ensure that happens.”
DeAngelo based the bills off a report from the Office of the State Auditor, which looked at the Department of Labor and Workforce Development’s Unemployment Insurance Services program for the period of July 1, 2009 through June 30, 2011. The audit focused on benefit payments and uncovered various ways the system that could be improved or updated to improve the collection of data and provide a more timely verification of wages earned and beneficiary’s status
The bills:
· Shortens the time period in which employers are required to file reports on wages earned by their employees from a quarterly report to a monthly report (A-2534); and
· Requires the Department of the Treasury to collect for overpayment of UI benefits (A-2536).
The first bill (A-2534) requires employers to submit certain information to the Department of Human Services regarding employees who are terminated from employment in this state.
Under current law, employers and labor organizations doing business in the state are required to report certain information to the department regarding: (1) the hiring of, or contracting with, any person who works in this State and to whom the employer anticipates paying earnings; (2) the re-hiring or return to work of any employee who is laid off, furloughed, separated, granted a leave without pay, or terminated from employment in this State; and (3) any other employee hired by the employer to work in the State who was not previously employed by the employer; or was previously employed by the employer but has been separated from the prior employment for at least 60 consecutive days.
The law requires this information to be reported to the department within 20 days of the hiring, re-hiring, or return to work of the employee (every 15 days for employers who transmit reports electronically), and provides for reported information to be shared with state agencies operating employment security and workers’ compensation programs and with any other federal or state agency deemed appropriate by the Commissioner of Human Services.
This bill expands these existing reporting requirements to mandate the reporting of similar information for employees terminated from employment. Under the bill, employers and labor organizations doing business in the state are required to report to the department the ending of employment for an employee who is laid off, furloughed, separated, granted a leave without pay, or terminated from employment in this state, including the wages paid to the employee and the number of base weeks worked by the employee during the calendar quarter in which the employment ends.
The bill establishes, in statute, that the employment information required to be reported to the department will comprise and be known as the Employee Status Report.
“If an individual is collecting unemployment benefits, but becomes employed at some point in the quarter and does not voluntarily notify the department, it would not be aware for up to 30 days after the end of the quarter,” DeAngelo said. “This would allow the individual to fraudulently collect unemployment benefits for many weeks. That’s unacceptable.”
The other bill (A-2536) aims to eliminate fraud in the UI system.
It requires the Department of the Treasury to collect overpayments of unemployment insurance benefits. The bill directs the Department of Labor and Workforce Development to file a notice of debt with the Department of the Treasury upon the failure of an individual debtor to pay a debt incurred due to overpayment of unemployment benefits to the debtor and owed to the state.
The bill provides that the Department of the Treasury must issue a certificate of debt and pursue the collection of the debt from the individual. The bill empowers the Department of the Treasury to file an application with the Office of Administrative Law for wage garnishment of an individual who has failed to reimburse the Department of Labor and Workforce Development for an overpayment of UI benefits within 120 days of the date that all appeals for that payment have been exhausted.
The amount of garnishment is determined by the Department of Labor and Workforce Development and may not exceed 25 percent of the debtor’s gross earnings, provided that after the garnishment, the debtor’s income will not be less than 250 percent of the poverty level for the individual, taking into account the size of the individual’s family.
