Sponsored by:
Assemblyman JACK M. CIATTARELLI
District 16 (Hunterdon, Mercer, Middlesex and Somerset)
Assemblywoman CONNIE WAGNER
District 38 (Bergen and Passaic)
Assemblyman ROBERT SCHROEDER
District 39 (Bergen and Passaic)
SYNOPSIS
Concerns unemployment insurance benefits and certain severance payments.
CURRENT VERSION OF TEXT
As introduced.
An Act concerning unemployment insurance benefits and supplementing Chapter 21 of Title 43 of the Revised Statutes.
Be It Enacted by the Senate and General Assembly of the State of New Jersey:
1. The amount of benefits payable to an individual for any week which begins in a period with respect to which the individual is receiving severance pay shall be reduced, but not below zero, by an amount equal to the amount of the severance pay that is reasonably attributable to that week. A lump sum severance payment in lieu of periodic severance payments shall reduce an individual’s weekly benefit rate, but not below zero, by an amount determined by dividing the total lump sum severance payment by the number of the individual’s base weeks with all employers in the base year or 26, whichever is less.
Any reduction of an individual’s weekly benefit rate pursuant to this section shall be computed to the next lower multiple of $1.00 if not already a multiple thereof, and any such reduction in the weekly benefit rate shall reduce the maximum total benefits of the individual during the benefit year.
Nothing in this section shall be construed so as to preclude an individual, who is otherwise eligible, from receiving any State or federal extension of unemployment compensation.
For purposes of this section, “severance pay” means payments made by an employer to an employee on account of separation from the service of the employer, regardless of whether the employer is legally bound by contract, statute, or otherwise to make those payments, except that “severance pay” does not include payments for pension, retirement, or accrued leave, or payments of supplemental unemployment benefits.
2. This act shall take effect immediately.
STATEMENT
This bill reduces the amount of unemployment insurance (UI) benefits payable to an individual for any week in which the individual is receiving severance pay.
The bill provides that an individual’s weekly UI benefits will be reduced, but not below zero, by an amount equal to the amount of severance pay received by the individual that week. The bill also provides that a lump sum severance payment will reduce the amount of weekly UI benefits payable to an individual, but not below zero, by an amount determined by dividing the total lump sum severance payment by the number of weeks the individual is eligible to receive UI benefits or 26, whichever is less.
The bill requires that any reduction in an individual’s weekly UI benefit rate will be computed to the next lower multiple of $1.00 if not already a multiple thereof, and will reduce the maximum total UI benefits that an individual is entitled to receive.
Finally, the bill defines “severance pay” as payments made by an employer to an employee on account of separation from the service of the employer, regardless of whether the employer is legally bound by contract, statute, or otherwise to make those payments, except that “severance pay” does not include payments for pension, retirement, or accrued leave, or payments of supplemental unemployment benefits.