By:  Ty Hyderally, Esq., Francine Foner, Esq.

The federal Coronavirus Aid, Relief, and Economic Security (CARES) Act was signed into law on March 27, 2020, when millions of New Jersey workers were displaced due to the COVID-19 Pandemic. The CARES Act provided assistance to workers who were negatively impacted by the coronavirus emergency by creating Pandemic Unemployment Assistance (PUA).

The minimum amount of PUA benefits paid to an eligible worker was $231 per week.  PUA recipients were also eligible for an extra $600 per week. The additional $600 per week was retroactive to the week ending April 4, 2020, and ended the week of July 25, 2020. Other PUA benefits expired September 4, 2021.

However, many New Jersey employees have received and continue to receive demands from the New Jersey Division of Unemployment Insurance (“Division”) to repay pandemic-related benefits, even if through no fault of their own. The Division was overwhelmed by the sheer volume of claims during the pandemic, which led to agency errors and/or simply lacking the resources to sufficiently review all claims. Unfortunately, for many, if not most, employees who received PUA benefits, those benefits have long been spent, and repayment would impose an undue hardship upon them.

In February 2022, after the federal government updated its guidance on pandemic-related unemployment benefits, the New Jersey Department of Labor (NJDOL) afforded some relief to victims of this unemployment chaos, under certain circumstances.  However, there remain many recipients of PUA benefits who remain liable for repayment of non-fraudulent unemployment benefits they received.

Hopefully this will not be for long. On June 29, 2022, Senate Bill S2357 (A3830), which, among other things, waives recovery of non-fraudulent unemployment payments, unanimously passed both houses. Specifically, this proposed law states that an employee “shall not be liable to repay all or any portion of the overpayment if the representative finds that the person received the overpayment of benefits because of errors or failures to provide information by the employer or errors by the division, and not because of an error, or knowing, fraudulent nondisclosure or misrepresentation, by the person.”

In addition, even if an employee is found to have been the cause of the non-fraudulent overpayment, they will only be liable for a portion of the overpayment, not to exceed 50%, “taking into consideration possible financial hardship to the person, whether recovery would be against equity and good conscience, and how much the person’s errors, compared to errors of the division or employer, contributed to the overpayment occurring.”

The proposed law also aims to make it easier for claimants to speak with a representative of the Division about their claim or appeal, including the requirement that available appointment times to speak with a representative to be “clearly and prominently” displayed.  The new law would also require the Division to provide a claimant with any information it has received from their employer, and an opportunity to respond to that information.

Another positive for employees is a provision stating that, when an employer has failed to timely provide the Division with information as required at the time of separation from employment and therefore, the unemployment benefit eligibility determination is made based upon other information, unemployment benefits are to commence immediately. The bill also extends the time for an employee to file an appeal of an initial determination from 10 to 21 days after the date of mailing. The Act shall take effect 120 days following its enactment, but before then, all administrative measures necessary to implement the law are to be completed.

We anticipate that Governor Murphy will sign this bill into law in the near future and help New Jersey workers in need of relief from unjust demands for repayment of non-fraudulent benefits, as well as make unemployment procedures more equitable for all employees going forward.

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