Employers' Pensions and Benefits Administration Manual (EPBAM)
   

 

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State Employee Unemployment Insurance
and Temporary Disability Insurance



Table of Contents

Introduction

On the basis of federal legislation, certain State employees, primarily those working in State institutions, were initially covered by unemployment insurance as early as 1972. In 1978, the plan was extended to most State employees. Initially, the Division's responsibility was limited to the collection of employee contributions and the remittance of this money and employer contributions to the Department of Labor. With the expansion of the program to most State employees, the services of a contractor were obtained in order to monitor and complete claims, as well as prepare quarterly reports of claims activity. Quarterly reports are sent to the Division to verify the value of claims paid by the Division of Unemployment and Disability Insurance. The additional responsibility of oversight of contracting services was transferred to the Division in June of 1979, when a contract was awarded on the basis of competitive bids.

In 1980, in conformity with State law, Temporary Disability Insurance coverage was mandated for State employees who are covered by Unemployment Insurance. The Disability Insurance Service of the Department of Labor is responsible for preparing reports of claims activities and conducting educational programs similar to those that are presently being performed by a contractor for Unemployment Insurance purposes.

Unemployment Insurance

State Unemployment Insurance Report

The following describe the benefit administration for purposes of unemployment insurance.

Notice of Employee Separation

When an employee's services are terminated, the contractor responsible for claims control and review should be immediately contacted and advised of the reason for the separation. Currently, separation information is being provided to the contractor by phoning the date to a voice response unit.

Employer-Employee Liability

Under the statute, the State is liable for the employer's cost of unemployment insurance and temporary disability insurance benefits. Covered employees, including employees of the various State higher education institutions, are required to pay one-half of one percent of taxable wages in each calendar year for Temporary Disability Insurance. Employees covered by the unemployment program pay at a rate of 0.425% of taxable wages each year, a portion of which is deposited in the State's Health Care Subsidy Fund and the Workforce Development Partnership Fund. The amount of taxable wages is determined annually by the Department of Labor.

Reporting Procedures

The Division of Pensions and Benefits receives a weekly unemployment contribution report from the State's Centralized Payroll. On a quarterly basis, the State higher education institutions send a contribution report along with a check representing the total contributions deducted from employers for the quarterly period. The institutions must file their report and send the required remittance to the Division by the 15th of the month following the end of each calendar quarter. The report is prepared in duplicate: the original is sent to the Division, and a duplicate is retained by the employer. The instructions needed to complete the report are detailed on the back of the form.

Unemployment Workforce Development and Health Care Contributions

Contributions deducted from an employee's wages are reported and paid to the Division of Pensions and Benefits on a quarterly basis. The checks covering the total amount of the contributions must be made payable to the "Treasurer-State of New Jersey." The quarterly reports are filed with the contributions due within 15 days after the end of each calendar quarter, and the employer's identification number (EIN) must always be indicated on the report. The report is prepared in duplicate: the original is sent to the Division of Pensions and Benefits, and a duplicate copy is retained by the employer. The instructions needed to complete the report are detailed on the reverse side.

Services Performed by the Contractor

The contractor provides direction and assistance for unemployment purposes with respect to wage reporting, claims processing, training programs for personnel-payroll staff, attendance at hearings, and information reports.

The contractor, based on payroll and separation information provided by State biweekly and monthly reporting employers, reviews and audits all claims notices and determinations, both monetary and non-monetary, and consults with personnel officers as to the filing of protests and appeals. Also, the contractor will protest all cases in which the initial determination concerning an award is incorrect or questionable, and file an appeal in a proper case. If a hearing is held on a protested claim, a representative of the contractor will attend the hearing to provide assistance to the representative of the employing agency.

Quarterly reports will be remitted to the Division showing statistical information on the State's claim experience, and will include information to identify the reasons for separations, number of claims, liability, etc.

Temporary Disability Insurance Benefits

Temporary Disability Insurance Report

When a covered employee becomes sick or disabled and is under the care of a licensed physician, dentist, podiatrist, or chiropractor, you must provide the employee with Form DS-1, Claim for Disability Benefits. The form should be completed and mailed promptly. Loss of benefits can result if it is filed more than 30 days after the onset of the disability.

For purposes of temporary disability insurance, benefits are reduced by the amount paid concurrently under any governmental or private retirement, pension, or permanent disability benefit or allowance program to which the individual's most recent employer contributed on the employee's behalf. However, social security retirement benefits do not reduce benefits paid under the State disability insurance program. Temporary disability benefits are subject to automatic deductions for Social Security (FICA) tax purposes.

Benefit Payments

No benefits are payable for the first seven days of each period of disability. If the claimant is also eligible for benefits in the three consecutive weeks immediately succeeding the first seven days, then those first seven days will also be payable. The weekly maximum benefit is payable for no more than 26 weeks with respect to any one period of disability. However, employees will not be able to collect disability benefits until they have exhausted all their accumulated sick leave. Benefits will be determined by the Disability Insurance Service Unit, Department of Labor.

For purposes of temporary disability insurance payments to a retiree from a State-administered retirement system, pension offset provisions are applicable only if the pensioner is being paid by the most recent employer.

Reporting Procedure and Reports

The procedure for reporting and remittance of Unemployment, Workforce Development and Health Care contributions is followed for temporary disability insurance purposes. However, a separate Report of Temporary Disability Insurance must be completed and sent to the Division of Pensions and Benefits. The reports are sent together with the checks covering the total amount of temporary disability insurance contributions deducted from the employees' taxable wages.

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Last Updated: May 18, 2011