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DeAngelo Introduces 3-Bill Package to Combat Unemployment Benefits Fraud and Ensure System is Better Protected for Out-of-Work New Jerseyans

(TRENTON) — Assemblyman Wayne DeAngelo on Tuesday announced he’s introduced three bills 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.

“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 basic steps, we can better ensure that happens. And with the nation’s 4th highest unemployment rate, this is a must.”

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:

  • Shorten 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-3810);
  • Require the Department of the Treasury to collect for overpayment of UI benefits (A-3811); and
  • Require officials to make death and incarceration notifications to eliminate fraud in the UI system.

“These are common sense steps that would help unemployed residents and give taxpayers more confidence their money in being protected,” DeAngelo said. “Preventing fraud can go a long way toward ensuring a better system, and that’s something residents and businesses — everyone for that matter — can support.”

The first bill (A-3810) 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.

This would provide a timely reporting of wages to the Department of Labor and Workforce Development to assist the department in identifying individuals who may be collecting benefits for which they are not eligible.

The audit detailed the estimated time lag of wage reporting by employers of as much as four months. Employers must report the wages earned by the employee on a quarterly form required to be submitted by the employer within 30 days of the end of the calendar quarter. Therefore, wages earned in the first quarter may not be reported to the department until April 30.

“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 a maximum of 17 weeks. That’s unacceptable.”

The legislation would require monthly reporting due to the department within 10 business days of the last day of the month.

“This will drastically reduce any lag time between an individual being hired and the department’s ability to cross check that data, giving the department the tools to decrease overpayments and result in savings,” DeAngelo said.

The second bill (A-3811) would require 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.

Under the bill, the Department of the Treasury must issue a certificate of debt and pursue the collection of the debt from the individual. The bill provides that the Department of the Treasury may file an application with the Office of Administrative Law for wage garnishment of an individual who has failed to reimburse the department for an overpayment of UI benefits within 60 days of the date that all appeals for that payment have been exhausted.

The amount of garnishment is determined by the department 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.

The third bill (A-3812) aims to eliminate fraud in the UI system.

Under the bill, the state registrar is directed to facilitate the electronic notification, upon completion of the death record and issuance of a burial permit, of a decedent’s name, Social Security number and last known address to the Department of Labor and Workforce Development.

Additionally, the Department of Corrections is required to provide the Department of Labor and Workforce Development with the name and Social Security number of each inmate at the time of incarceration.

“The department would be instructed to establish a system to cross-check the death records and the list of inmates with files of individuals who are receiving unemployment insurance or temporary disability insurance benefits,” DeAngelo said. “The cross check will act as a safeguard for these public benefit programs and diminish the chance of false payments of unemployment and disability benefits.”