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NJ LAWMAKERS AVOIDED A $1 BILLION TAX INCREASE ON EMPLOYERS AND REFORMED AN EMPLOYEE’S ELIGIBILITY FOR UNEMPLOYMENT BENEFITS

NJ LAWMAKERS AVOIDED A $1 BILLION TAX INCREASE ON EMPLOYERS AND REFORMED AN EMPLOYEE’S ELIGIBILITY FOR UNEMPLOYMENT BENEFITS
07 Jul 2010 Uncategorized

NJ LAWMAKERS AVOIDED A $1 BILLION TAX INCREASE ON EMPLOYERS AND REFORMED AN EMPLOYEE’S ELIGIBILITY FOR UNEMPLOYMENT BENEFITS

With the signing of S-1813, Chapter 37 of the Public Laws of 2010 on June 30, 2010, New Jersey employers received a much needed break in the form of a reduction in unemployment taxes. The new law prevents an automatic tax increase that was scheduled to take effect on July 1, 2010, which would have increased an employer’s unemployment insurance taxes by approximately 52% – – to an average of $400 per employee, with some employers paying as much as $1,000 per employee. New Jersey Unemployment Insurance fund is insolvent and has been borrowing funds from the federal government since March 2009.

Additionally, new rules for terminations for “misconduct” were adopted making it more difficult for individuals to qualify for unemployment benefits. Specifically, a new category identified as “severe misconduct,” i.e., repeated violations of an employer’s policy, was created barring individuals from unemployment until they become re-employed, work for at least four weeks, and earn at least six times their weekly benefit rate. Employees who are discharged for lesser forms of misconduct are barred from receiving benefits for seven weeks after discharge, up from five weeks under the prior law.

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