A1575

An Act concerning the calculation of the average weekly wage for Temporary Disability Insurance benefits and amending P.L.1948, c.110.

Be It Enacted by the Senate and General Assembly of the State of New Jersey:

1. Section 3 of P.L.1948, c.110 (C.43:21-27) is amended to read as follows:

3. As used in this act, unless the context clearly requires otherwise:

(a) (1) "Covered employer" means any individual or type of organization, including any partnership, association, trust, estate, joint-stock company, insurance company or corporation, whether domestic or foreign, or the receiver, trustee in bankruptcy, trustee or successor thereof, or the legal representative of a deceased person, who is an employer subject to the chapter to which this act is a supplement, designated as the "unemployment compensation law" (R.S. 43:21-1 et seq.), except the State, its political subdivisions, and any instrumentality of the State unless such governmental entity elects to become a covered employer under the "Temporary Disability Benefits Law"; provided, however, that commencing with the effective date of this act the State of New Jersey, including Rutgers, The State University, the University of Medicine and Dentistry of New Jersey and the New Jersey Institute of Technology, shall be deemed a covered employer, as defined herein.

(2) Any governmental entity or instrumentality which is an employer under R.S. 43:21-19(h)(5) may elect to become a "covered employer" under this subsection beginning with the date on which its coverage under subsection 19(h)(5) begins or as of January 1 of any year thereafter by filing written notice of such election with the division within at least 30 days of the effective date. Such election shall remain in effect for at least two full calendar years and may be terminated as of January 1 of any year thereafter by filing with the division a written notice of termination at least 30 days prior to the termination date.

(b) "Covered individual" means any person who is in employment, as defined in the chapter to which this act is a supplement, for which the individual is entitled to remuneration from a covered employer, or who has been out of such employment for less than two weeks. However, a "covered individual" who is employed by the State of New Jersey, including Rutgers, The State University, the University of Medicine and Dentistry of New Jersey and the New Jersey Institute of Technology, or by any governmental entity or instrumentality which elects to become a "covered employer" pursuant to this amendatory act, shall not be eligible to receive any benefits under the "Temporary Disability Benefits Law" until such individual has exhausted all sick leave accumulated as an employee in the classified service of the State or accumulated under terms and conditions similar to classified employees or accumulated under the terms and conditions pursuant to the laws of this State or as the result of a negotiated contract with any governmental entity or instrumentality which elects to become a "covered employer."

"Covered individual" shall not mean any member of the Division of State Police in the Department of Law and Public Safety.

(c) "Division" or "commission" means the Division of Unemployment and Temporary Disability Insurance of the Department of Labor, and any transaction or exercise of authority by the director of the division shall be deemed to be performed by the division.

(d) "Day" shall mean a full calendar day beginning and ending at midnight.

(e) "Disability" shall mean such disability as is compensable under section 5 of this act.

(f) "Disability benefits" shall mean any cash payments which are payable to a covered individual pursuant to this act.

(g) "Period of disability" with respect to any individual shall mean the entire period of time during which the individual is continuously and totally unable to perform the duties of his employment, except that two periods of disability due to the same or related cause or condition and separated by a period of not more than 14 days shall be considered as one continuous period of disability; provided the individual has earned wages during such 14-day period with the employer who was the individual's last employer immediately preceding the first period of disability.

(h) "Wages" shall mean all compensation payable by covered employers to covered individuals for personal services, including commissions and bonuses and the cash value of all compensation payable in any medium other than cash.

(i) (1) (Deleted by amendment, P.L.2001, c.17).

(2) (Deleted by amendment, P.L.2001, c.17).

(3) "Base week" with respect to periods of disability commencing on or after October 1, 1985 and before January 1, 2001, means any calendar week during which an individual earned in employment from a covered employer remuneration equal to not less than 20% of the Statewide average weekly remuneration as determined under subsection (c) of R.S.43:21-3, which shall be adjusted to the next higher multiple of $1.00 if not already a multiple thereof.

(4) "Base week" with respect to periods of disability commencing on or after January 1, 2001, means any calendar week of an individual's base year during which the individual earned in employment from a covered employer remuneration not less than an amount 20 times the minimum wage in effect pursuant to section 5 of P.L.1966, c.113 (C.34:11-56a4) on October 1 of the calendar year preceding the calendar year in which the benefit year commences, which amount shall be adjusted to the next higher multiple of $1.00 if not already a multiple thereof, except that if in any calendar week an individual subject to this paragraph is in employment with more than one employer, the individual may in that calendar week establish a base week with respect to each of the employers from whom the individual earns remuneration equal to not less than the amount defined in this paragraph during that week.

(j) (1) "Average weekly wage" with respect to periods of disability commencing before July 1, 2005 means the amount derived by dividing a covered individual's total wages earned from the individual's most recent covered employer during the base weeks in the eight calendar weeks immediately preceding the calendar week in which the disability commenced, by the number of such base weeks. If this computation yields a result which is less than the individual's average weekly earnings in employment, as defined in the chapter to which this act is a supplement, with all covered employers during the base weeks in such eight calendar weeks, then the average weekly wage shall be computed on the basis of earnings from all covered employers during the eight base weeks immediately preceding the week in which the disability commenced.

(2) "Average weekly wage" with respect to periods of disability commencing on or after July 1, 2005 means the amount derived by dividing a covered individual's total base year wages earned from all covered employers by the number of base weeks.

(cf: P.L.2001, c.17, s.3)

2. This act shall take effect 90 days following the date of enactment.

STATEMENT

This bill changes the formula that is used to calculate the average weekly wage for Temporary Disability Insurance benefits. Under current law, the method for calculating the average weekly wage for Temporary Disability Insurance benefits is derived by totaling the individual's wages earned from the most recent covered employer for the eight calendar weeks prior to the onset of the disability and dividing that total by the number of base weeks in which those wages were earned. The result is then used to determine the individual's weekly benefit rate, which is calculated at two-thirds of the individual's average weekly wage. This bill changes that formula by totaling the individual's wages from all covered employers for the year. The formula proposed by this bill provides a more consistent and equitable approach in calculating an individual's average weekly wage.