NJ Governor Introduces Plan to Mitigate UI Burden on Businesses
We reported last week that an unemployment tax is scheduled to be levied on NJ businesses as a result of the underfunding of the state’s unemployment insurance fund. To relieve New Jersey businesses from the burden created by this situation, Governor Christie unveiled a plan to substantially reduce the tax burden on businesses, but would make other changes to the state’s unemployment benefits program as well.
The plan introduces several key components:
The rate increase would be capped at 17%, or $130 per employee.
- New Jersey currently has one of the highest benefit levels in the country, at $600 per week. The Governor’s plan calls for a reduction in that amount to $550, which would save the state $295MM.
- New Jersey would adopt a “hold-back week” similar to other states, delaying the receipt of benefits until the 8th day after the first day of unemployment. If the claimant qualifies for the full 26 weeks, then (s)he would receive benefits for that period. This change would save $67MM.
- New Jersey would toughen the eligibility standard for employees discharged for misconduct. The Governor’s plan requires employees who fall into this category to obtain employment for a specified period of time before once again qualifying for unemployment benefits. This change would save the state $189 MM.
- Again following the lead of several other states, New Jersey would adopt the provision that it would only extend benefits if 100% funded with federal money. This would save $1.6 billion over the next two years.
Also, the Governor supports a constitutional amendment preventing any future raiding of the fund to bankroll other state initiatives and/or projects, and continue to rely on federal funding of extended unemployment benefits and avoid devastating payroll tax increases.
The Christie Plan to Protect New Jersey’s Small Businesses can be found at http://www.njbusinessmatters.com/files/Gov_Christie_UI_Fund_Solutions.pdf.