By the middle of February, every who collected 2006 unemployment benefits in New Jersey should have received a 1099 form. The statements were sent out in late January. The New Jersey Department of Labor should be contacted if that form is not in hand. The 1099 details the income and deductions from unemployment benefits. Thousands of people in the state collected unemployment in 2006, totaling over $156 million in benefit payments.
If you or someone you know has ever been laid off, you know what a toll it can take on a person. Losing your job is nowhere near an easy experience. The government has provided us with a program that can deliver income during this time of crisis. That is called unemployment insurance.
Filing for unemployment can be done in person and sometimes online. Details about the company, length of time with the company and reason for separation will be asked. It can be a lengthy process depending on the situation. One of the requirements to receive the benefit is to be in active pursuit of work. This is so that the people who truly want to work but are having a hard time can be helped.
The New Jersey Dept. of Labor wants benefits obtainers to be reminded that unemployment is taxable. If the deductions were not taken from unemployment checks automatically, it is the recipient’s responsibility to pay the necessary taxes on the money. To file the unemployment income along with regular income taxes, the 1099 is provided. It is easy to forget about the taxes on this benefit. This is especially true of those who may have only gotten payments for two weeks.
The state of New Jersey has officially changed the maximum weekly benefits that unemployed workers can for unemployment benefits. The Commissioner of the New Jersey Department of Labor and Workforce Development, a fellow by the name of David J. Socolow, has put these new laws into effect starting January 1, 2007. That means now, or to be more exact, yesterday.
This change to the unemployment system is not unprecedented or terribly big news. In fact, the change to the maximum benefit level is rather typical, as the labor laws on the unemployment system actually call for a revision in the benefit payment rate every year, depending on what the average wage is per week for a worker in the state of New Jersey. In the case of 2007, the new benefit rate is based on the weekly average worker salary from 2005. That just happened to be 2.9 percent higher than what it was in 2004—from $920.88 to $947.64.
That means that folks on unemployment insurance can then expect a similar increase in their unemployment benefits. The raise for 2007 will take the maximum weekly unemployment benefit to $536, compared with the 2006 pay out of $521.
Under the revision of the unemployment labor law, there is also a change to the amount of worker wages that can be taxed by the state, and paid by employers. Before, the wages that could be subject to such taxation had been at $25,800. They are now increased in 2007 to $26,600.
As we all remember from the review I did of each state’s unemployment insurance benefits program, employers have to pay these taxes in order for unemployment insurance to be paid to their former employees. The particular tax rate paid on these wages depends on if the employer is new, or they are an old employer, what sort of “experience rating” they have.
New Jersey has special instances in its unemployment insurance system where the person who is actually considered the employer isn’t the person who you would think it was. In other words, employer in this case means the person or entity who is responsible for paying the unemployment benefits.
Take this case: There is a crew leader who is in charge of a crew of agricultural workers. In the New Jersey unemployment insurance system, that crew leader would be considered the employer for that crew and would be responsible for their unemployment insurance tax payments. That of course, wouldn’t happen without an open agreement between the crew leader and his ultimate employer, the agricultural company that he is doing the leading for.
This agreement between the crew leader and the agricultural company must also be fully in agreement with the state and federal laws. One such law holds that the crew leader, if he or she is going to take on this responsibility, has to be registered. The law that calls for this registration is none other than the New Jersey Crew Leader Registration Act.
Another interesting case is if you are a homeowner and have domestic workers under your keep, whether they be your cook, a babysitter, a nanny, or your yards man. You could be responsible for their unemployment insurance, even if you don’t pay them with your company’s bank roll. If you have paid any of these domestic workers more than $1000 in any calendar quarter, then you could be liable for their unemployment insurance taxes.
Otherwise, the standard rules of being liable for unemployment insurance taxes hold true in New Jersey. For instance, if you are a company that employed one or more workers, and have paid more than $1000 in wages in the calendar year, then you are liable for unemployment insurance taxes.
Every individual, group of individuals, firm or organization that employs one or more persons on a permanent, temporary or part-time basis, whether or not they are subject to unemployment compensation law, must maintain and retain for the current year and four preceding calendar years records of each individual worker, including full name, address, and Social Security number; the date hired, rehired, and returned to work after temporary layoff; the date separated from employment and the reason for such separation; the number of base weeks and wages; total remuneration paid; the full name of each employee and the days of the calendar week in which work was performed for remuneration; the beginning and ending dates of each pay period; the total amount of wages paid to each employee in each pay period; and the total remuneration paid to all such individuals combined, separately by money and other remuneration in each pay period and in all pay periods within each quarter. This information is noted on the New Jersey Unemployment Insurance posters.
Gross wages include every form of remuneration paid to an employee either directly or indirectly, including salary (sick leave pay, vacation pay, holiday pay, back pay awards), commissions, bonuses, and the cash value of all compensation in any medium other than cash as actually paid or otherwise distributed to the employee during the reported quarter. Payments in kind for personal service such as meals, board, or lodging received by a worker from his employing unit in addition to or in lieu of (rather than as deduction from) money are deemed to be remuneration.
In addition to keeping information on file, employers must also keep posted New Jersey Unemployment Insurance posters in a location that is visible to all employees.
When unemployment benefits are paid to a claimant, a charge equal to the benefit amount is made to the account of the employer for whom the individual worked. If the claimant worked for more than one employer during the period on which the benefits are based, each base year employer is charged proportionally for each benefit payment, which is determined by the amount of wages that the employer paid the claimant during the base year and total wages received during that period. That is, under proportional charging, all base year chargeable employers share in the cost of each week of benefit payments. Claimants will learn of this rule by reading the posted New Jersey Unemployment Insurance posters.
The employer is notified of these charges quarterly on the form B-187Q, “Unemployment Benefits Charged to Experience Rating Account.” employers should check these listings carefully against their payroll records to help prevent incorrect charges and improper benefit payments.
The New Jersey Unemployment Insurance posters are currently available reflecting all the latest information.
The New Jersey Unemployment Insurance law has undergone some very important changes, and I wanted to take this opportunity to go over at least a portion of them. These changes affect employers and employees, and it will be very important for everyone in the workforce to take notice of them.
As of this past January, the “waiting week” has been eliminated. Unemployed persons can file and begin receiving benefits right away; in the past, they had to wait one week after filing before benefits could be approved.
New Jersey has now established a state emergency unemployment benefits program. These benefits are paid entirely by the state, to people who have exhausted all of their compensation but still meet the eligibility requirements for regular unemployment compensation. The amount they receive will be the same weekly benefit amount of their most recent regular unemployment compensation claim. These individuals must not be eligible for any other unemployment benefits. The emergency benefit amount will be limited to 10 times the regular weekly benefit amount that the person was receiving.
For employers, the tax table will change after July 1, 2002, because of the lower fund reserve ratio. That means the computation rate for employer contributions will be reduced. From January to June 30, 2002, the rate is 36 percent; from July 1, 2002 to June 30,2003, the rate will be 15 percent. The figure for worker contributions will also be lowered. Worker contributions to the unemployment compensation fund will be 0.1825 percent until June 30, 2003, and 0.3825 percent thereafter.
I’m sure most employers are aware that the unemployment insurance law is updated often, as are many of the state’s labor laws. That’s why it’s so important to use the latest posters in the workplace, and to stay abreast of changes in the law.