ASSEMBLY, No. 1362

STATE OF NEW JERSEY

Introduced Pending Technical Review by Legislative Counsel

PRE-FILED FOR INTRODUCTION IN THE 1996 SESSION

By Assemblyman STUHLTRAGER

An Act concerning records of disputed unemployment compensation benefit claims and amending R.S.43:21-6 and R.S.43:21-11.

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

    1. R.S.43:21-6 is amended to read as follows:

    43:21-6. Claim for benefits.

    (a) Filing. Claims for benefits shall be made in accordance with such regulations as the Director of the Division of Unemployment and Temporary Disability Insurance of the Department of Labor of the State of New Jersey may approve. Each employer shall post and maintain on his premises printed notices of his subject status, of such design, in such numbers and at such places as the director of the division may determine to be necessary to give notice thereof to persons in the employer's service. Each employer shall give to each individual at the time he becomes unemployed a printed copy of benefit instructions. Both the aforesaid notices and instructions shall be supplied by the division to employers without cost to them.

    (b)(1) Procedure for making initial determinations with respect to benefit years commencing on or after January 1, 1953.

    A representative or representatives designated by the director of the division and hereafter referred to as a "deputy" shall promptly examine the claim, and shall notify the most recent employing unit and, successively as necessary, each employer in inverse chronological order during the base year. Such notification shall require said employing unit and employer to furnish such information to the deputy as may be necessary to determine the claimant's eligibility and his benefit rights with respect to the employer in question.

    In his discretion, the director may appoint special deputies to make initial or subsequent determinations under [subsections 4(f) and 5(d)

of this chapter] subsection (f) of R.S.43:21-4 and subsection (d) of R.S.43:21-5.

    If any employer or employing unit fails to respond to the request for information within 10 days after the mailing of such request, the deputy shall rely entirely on information from other sources, including an affidavit to the best of the knowledge and belief of the claimant with respect to his wages and time worked. Except in the event of fraud, if it is determined that any information in such affidavit is erroneous, no penalty shall be imposed on the claimant.

    The deputy shall promptly make an initial determination based upon the available information. The initial determination shall show the weekly benefit amount payable, the maximum duration of benefits with respect to the employer to whom the determination relates, and the ratio of benefits chargeable to the employer's account for benefit years commencing on or after July 1, 1986, and also shall show whether the claimant is ineligible or disqualified for benefits under the initial determination. The claimant and the employer whose account may be charged for benefits payable pursuant to said determination shall be promptly notified thereof.

    Whenever an initial determination is based upon information other than that supplied by an employer because such employer failed to respond to the deputy's request for information, such initial determination and any subsequent determination thereunder shall be incontestable by the noncomplying employer, as to any charges to his employer's account because of benefits paid prior to the close of the calendar week following the receipt of his reply. Such initial determination shall be altered if necessary upon receipt of information from the employer, and any benefits paid or payable with respect to weeks occurring subsequent to the close of the calendar week following the receipt of the employer's reply shall be paid in accordance with such altered initial determination.

    The deputy shall issue a separate initial benefit determination with respect to each of the claimant's base year employers, starting with the most recent employer and continuing as necessary in the inverse chronological order of the claimant's last date of employment with each such employer. If an appeal is taken from an initial determination, as hereinafter provided, by any employer other than the first chargeable base year employer or for benefit years commencing on or after July 1, 1986, that employer from whom the individual was most recently separated, then such appeal shall be limited in scope to include only one or more of the following matters:

    (A) The correctness of the benefit payments authorized to be made under the determination;

    (B) Fraud in connection with the claim pursuant to which the initial determination is issued; or

    (C) The refusal of suitable work offered by the chargeable employer filing the appeal;

    (D) Gross misconduct as provided in subsection (b) of R.S.43:21-5.

    The amount of benefits payable under an initial determination may be reduced or canceled if necessary to avoid payment of benefits for a number of weeks in excess of the maximum specified in subsection (d) of [section] R.S.43:21-3 [of this Title].

    Unless the claimant or any interested party, within seven calendar days after delivery of notification of an initial determination or within 10 calendar days after such notification was mailed to his or their last-known address and addresses, files an appeal from such decision, such decision shall be final and benefits shall be paid or denied in accordance therewith, except for such determinations as may be altered in benefit amounts or duration as provided in this paragraph. Benefits payable for periods pending an appeal and not in dispute shall be paid as such benefits accrue; provided that insofar as any such appeal is or may be an appeal from a determination to the effect that the claimant is disqualified under the provisions of R.S.43:21-5 or any amendments thereof or supplements thereto, benefits pending determination of the appeal shall be withheld only for the period of disqualification as provided for in said section, and notwithstanding such appeal, the benefits otherwise provided by this act shall be paid for the period subsequent to such period of disqualification; and provided, also, that if there are two determinations of entitlement, benefits for the period covered by such determinations shall be paid regardless of any appeal which may thereafter be taken, but no employer's account shall be charged with benefits so paid, if the decision is finally reversed.

    (2) Procedure for making initial determinations in certain cases of concurrent employment, with respect to benefit years commencing on or after January 1, 1953 and prior to benefit years commencing on or after July 1, 1986.

    Notwithstanding any other provisions of [this Title] the "unemployment compensation law," R.S.43:21-1 et seq., if an individual shows to the satisfaction of the deputy that there were at least 13 weeks in his base period in each of which he earned wages from two or more employers totaling $30.00 or more but in each of which there was no single employer from whom he earned as much as $100.00, then such individual's claim shall be determined in accordance with the special provisions of this paragraph. In such case, the deputy shall determine the individual's eligibility for benefits, his average weekly wage, weekly benefit rate and maximum total benefits as if all his base year employers were a single employer. Such determination shall apportion the liability for benefit charges thereunder to the individual's several base year employers so that each employer's maximum liability for charges thereunder bears approximately the same relation to the maximum total benefits allowed as the wages earned by the individual from each employer during the base year bears to his total wages earned from all employers during the base year. Such initial determination shall also specify the individual's last date of employment within the base year with respect to each base year employer, and such employers shall be charged for benefits paid under said initial determination in the inverse chronological order of such last date of employment.

    (3) Procedure for making subsequent determinations with respect to benefit years commencing on or after January 1, 1953. The deputy shall make determinations with respect to claims for benefits thereafter in the course of the benefit year, in accordance with any initial determination allowing benefits, and under which benefits have not been exhausted, and each notification of a benefit payment shall be a notification of an affirmative subsequent determination. The allowance of benefits by the deputy on any such determination, or the denial of benefits by the deputy on any such determination, shall be appealable in the same manner and under the same limitations as is provided in the case of initial determinations.

    (c) Appeals. Unless such appeal is withdrawn, an appeal tribunal, after affording the parties reasonable opportunity for fair hearing, shall affirm or modify the findings of fact and the determination. The parties shall be duly notified of such tribunal's decision, together with its reasons therefor, which shall be deemed to be the final decision of the board of review, unless within 10 days after the date of notification or mailing of such decision, further appeal is initiated pursuant to subsection (e) of this section.

    (d) Appeal tribunals. To hear and decide disputed benefit claims, including appeals from determinations with respect to demands for refunds of benefits under [section 43:21-16(d) of this chapter (R.S.43:21-1 et seq.)]subsection (d) of R.S.43:21-16, the director with the approval of the Commissioner of Labor shall establish impartial appeal tribunals consisting of a salaried body of examiners under the supervision of a Chief Appeals Examiner, all of whom shall be appointed pursuant to the provisions of Title [11 of the Revised Statutes] 11A, Civil Service , of the New Jersey Statutes and other applicable statutes.

    (e) Board of review. The board of review may on its own motion affirm, modify, or set aside any decision of an appeal tribunal on the basis of the evidence previously submitted in such case, or direct the taking of additional evidence, or may permit any of the parties to such decision to initiate further appeals before it. The board of review shall permit such further appeal by any of the parties interested in a decision of an appeal tribunal which is not unanimous and from any determination which has been overruled or modified by any appeal tribunal. The board of review may remove to itself or transfer to another appeal tribunal the proceedings on any claim pending before an appeal tribunal. Any proceedings so removed to the board of review shall be heard by a quorum thereof in accordance with the requirements of subsection (c) of this section. The board of review shall promptly notify the interested parties of its findings and decision.

    (f) Procedure. The manner in which disputed benefit claims, and appeals from determinations with respect to (1) claims for benefits and (2) demands for refunds of benefits under [section R.S.43:21-16(d) of this chapter (R.S.43:21-1 et seq.)]subsection (d) of R.S.43:21-16 shall be presented, the reports thereon required from the claimant and from employers, and the conduct of hearings and appeals shall be in accordance with rules prescribed by the board of review for determining the rights of the parties, whether or not such rules conform to common law or statutory rules of evidence and other technical rules of procedure. A full and complete record shall be kept of all proceedings in connection with a disputed claim. All records, reports, hearing tapes and transcripts concerning a disputed claim shall be preserved or released by the Division of Unemployment and Temporary Disability Insurance in accordance with the provisions of paragraph (3) of subsection (g) of R.S.43:21-11. All testimony at any hearing upon a disputed claim shall be recorded, but need not be transcribed unless the disputed claim is further appealed.

    (g) Witness fees. Witnesses [subpenaed] subpoenaed pursuant to this section shall be allowed fees at a rate fixed by the director. Such fees and all expenses of proceedings involving disputed claims shall be deemed a part of the expense of administering [this chapter] the "unemployment compensation law," (R.S.43:21-1 et seq.).

    (h) Court review . Any decision of the board of review shall become final as to any party upon the mailing of a copy thereof to such party or to his attorney, or upon the mailing of a copy thereof to such party at his last-known address. The Division of Unemployment and Temporary Disability Insurance and any party to a proceeding before the board of review may secure judicial review of the final decision of the board of review. Any party not joining in the appeal shall be made a defendant; the board of review shall be deemed to be a party to any judicial action involving the review of, or appeal from, any of its decisions, and may be represented in any such judicial action by any qualified attorney, who may be a regular salaried employee of the board of review or has been designated by it for that purpose, or, at the board of review's request, by the Attorney General.

    (i) Failure to give notice. The failure of any public officer or employee at any time heretofore or hereafter to give notice of determination or decision required in subsections (b), (c) and (e) of this section, as originally passed or amended, shall not relieve any employer's account of any charge by reason of any benefits paid, unless and until that employer can show to the satisfaction of the director of the division that the said benefits, in whole or in part, would not have been charged or chargeable to his account had such notice been given. Any determination hereunder by the director shall be subject to court review.

(cf: P.L.1984, c.24, s.4)

    2. R.S.43:21-11 is amended to read as follows:

    43:21-11. (a) Duties and powers of the Department of Labor. The department shall have power and authority to adopt, amend, or rescind such rules and regulations, require such reports, make such investigations, and take such other action as it deems necessary or suitable or to administer this chapter; provided that the Commissioner of Labor may delegate such power and authority, subject to his ultimate supervision and control. Such rules and regulations shall be effective upon publication in the manner, not inconsistent with the provisions of this chapter, which the department shall prescribe. The department shall determine its own organization and methods of procedure, in accordance with the provisions of this chapter. Whenever the department believes that a change in contribution or benefit rates will become necessary to protect the solvency of the fund, it shall promptly so inform the Governor and the Legislature, and make recommendations with respect thereto.

    (b) Regulations and general and special rules. General and special rules may be adopted, amended, or rescinded by the department. General rules shall become effective 10 days after filing with the Secretary of State and publication in one or more newspapers of general circulation in this State. Special rules shall become effective 10 days after notification to or mailing to the last known address of the individuals or concerns affected thereby. Regulations may be adopted, amended, or rescinded by the department and shall become effective in the manner and at the time prescribed by the department.

    (c) Publication. The department shall cause to be printed for distribution to the public the text of this chapter, the department's regulations and general rules, its annual reports to the Governor, and any other material the department deems relevant and suitable and shall furnish the same to any person upon application therefor.

    (d) Personnel. Subject to other provisions of this chapter, the department is authorized to appoint (subject to the provisions of Title [11] 11A, Civil Service , of the New Jersey Statutes), fix the compensation, and prescribe the duties and powers of such officers, accountants, attorneys, experts, and other persons as may be necessary in the performance of its duties under R.S.43:21-1 et seq. All positions shall be filled by persons selected and appointed on a nonpartisan merit basis from lists of eligible persons prepared by the Civil Service Commission, in accordance with the provisions of Title [11] 11A, Civil Service, of the New Jersey Statutes, except that any attorney, now or hereafter in office or position of legal assistant for the department, shall be placed in the exempt class of the civil service and thereafter shall not be subject to removal except for cause and then only in accordance with the provisions of Title [11] 11A, Civil Service , of the New Jersey Statutes; provided, however, that nothing herein shall be construed to apply to any attorney designated as special counsel in accordance with the provisions of [sections 43:21-6,]subsection (h) of R.S.43:21-6[,]and R.S.43:21-17. The division shall not employ or pay any person who is an officer or committee member of any political party organization. The commissioner may delegate to any such person so appointed such power and authority as he deems reasonable and proper for the effective administration of this chapter, and may in his discretion bond any person handling moneys or signing checks hereunder.

    (e) Employment Security Council. There shall be within the department an Employment Security Council, as established and constituted under the Department of Labor and Industry Act of 1948 (P.L.1948, c.446; C.34:1A-1 et seq.).

    (f) Employment stabilization. The department, with the advice and aid of the Employment Security Council, shall take all appropriate steps to reduce and prevent unemployment; to encourage and assist in the adoption of practical methods of vocational training, retraining and vocational guidance; to investigate, recommend, advise, and assist in the establishment and operation, by municipalities, counties, school districts, and the State, of reserves for public works to be used in times of business depression and unemployment; to promote the re-employment of unemployed workers throughout the State in every other way that may be feasible, and to these ends to carry on and publish the records of investigations and research studies.

    (g) Records and reports. (1) Each employing unit shall keep true and accurate employment records, containing such information as may be prescribed. Such records shall be open to inspection and be subject to being copied by the director of the division and the controller or their authorized representatives at any reasonable time. The department may require from any employing unit any sworn or unsworn reports, with respect to persons employed by it, which are deemed necessary for the effective administration of this chapter. Under such rules and regulations as may be adopted by the department, reports relative to wages and separation from employment may be required from any employer or employing unit at the time such employer or employing unit suspends business operations in this State, or from any employer or employing unit which fails to cooperate in submitting promptly the wage and employment data which may be required under paragraph (2) of subsection (b) of [section] R.S.43:21-6 [of this Title]. If the nature of such suspension is temporary or in the nature of a transfer, then the employer or employing unit may be excused from furnishing such a termination report upon assurances that proper arrangements have been made to supply any information which may be required under paragraph (2) of subsection (b) of [section] R.S.43:21-6 [of this Title]. The department may require from any employer or employing unit reports relative to wages and separation in such manner and at such time as may be necessary for the effective administration of this chapter.

    (2) All records, reports and other information obtained from employers and employees under [this chapter] the provisions of the "unemployment compensation law" (R.S.43:21-1 et seq.), except to the extent necessary for the proper administration of [this chapter] R.S.43:21-1 et seq., shall be confidential and shall not be published or open to public inspection other than to public employees in the performance of their public duties[, and shall not be subject to subpena or admissible in evidence in any civil action or proceeding other than one arising under this chapter], but any claimant at a hearing before an appeal tribunal, the division or the board of review shall be supplied with information from such records to the extent necessary for the proper presentation of his claim.

    (3) All records, reports, hearing tapes and transcripts concerning a disputed claim considered by the division pursuant to the provisions of the "unemployment compensation law" (R.S.43:21-1 et seq.), an appeal tribunal pursuant to subsection (d) of R.S.43:21-6, or the board of review pursuant to subsection (e) of R.S.43:21-6, shall be preserved by the Division of Unemployment and Temporary Disability Insurance for a period of two years after the completion of the final appeal hearing.

    If the interested party seeks to admit any record, report, hearing tape or transcript into evidence in any civil action or proceeding, the division shall provide the requested material within 30 days of the receipt of the written request by the interested party.

    At the end of the two-year period following the completion of the final appeal hearing, the division may destroy all records, reports, hearing tapes or transcripts concerning the respective disputed claim. The division shall give notice to the interested parties 30 days prior to the destruction of all records, reports, hearing tapes or transcripts and shall supply an interested party, upon its written request at that time, with a copy of any record, report, hearing tape or transcript.

    An interested party requesting records, reports, hearing tapes or transcripts pursuant to this paragraph (3) may be assessed with the actual costs of reproducing a copy of the records, reports, hearing tapes or transcripts which were requested.

    (4) Any officer or employee of the department who violates any provision of this section shall be liable to a fine of $200.00, to be recovered in a civil action in the name of the division, said fine when recovered to be paid to the unemployment compensation auxiliary fund for the use of said fund.

    (h) Oaths and witnesses. In the discharge of the duties imposed by this chapter, the controller, the appeal tribunal and any duly authorized representative or member of the division, the director or any deputy director thereof or member of the board of review shall have power to administer oaths and affirmations, take depositions, certify to official acts, and issue [subpenas] subpoenas to compel the attendance of witnesses and the production of books, papers, correspondence, memoranda and other records deemed necessary as evidence in connection with a disputed claim or the administration of this chapter. Witnesses [subpenaed] subpoenaed pursuant to this section shall in the discretion of the department be allowed fees at a rate to be fixed by it. Such fees shall be deemed a part of the expense of administering this chapter.

    (i) [Subpenas] Subpoenas. In case of contumacy by or refusal to obey a [subpena] subpoena issued to any person, any court of this State within the jurisdiction of which the inquiry is carried on or within the jurisdiction of which said person guilty of contumacy or refusal to obey is found or resides or transacts business, upon application by the department or its duly authorized representative, or the board of review, shall have jurisdiction to issue to such person an order requiring such person to appear before the board of review or a member thereof, the department or its duly authorized representative, there to produce evidence if so ordered or there to give testimony touching the matter under investigation or in question; and any failure to obey such order of the court may be punished by said court as a contempt thereof. Any person who shall without just cause fail or refuse to attend and testify or to answer any lawful inquiry or to produce books, papers, correspondence, memoranda, and other records, if it is in his power so to do, in obedience to a [subpena] subpoena of the division or of the board of review shall be punished by a fine of not more than $200.00 or by imprisonment for not longer than 60 days, or by both such fine and imprisonment, and each day such violation continues shall be deemed to be a separate offense.

    (j) Protection against self-incrimination. No person shall be excused from attending and testifying or from producing books, papers, correspondence, memoranda and other records before the department or the board of review or in obedience to the [subpena] subpoena of a member of the department or the board of review or a member thereof, or any duly authorized representative thereof in any cause or proceeding before the department, the board of review or a member thereof, on the ground that the testimony or evidence, documentary or otherwise, required of him may tend to incriminate him or subject him to a penalty or forfeiture; but no individual shall be prosecuted or subject to any penalty or forfeiture for or on account of any transaction, matter, or thing concerning which he is compelled, after having claimed his privilege against self-incrimination, to testify or produce evidence, documentary or otherwise, except that such individual so testifying shall not be exempt from prosecution and punishment for perjury committed in so testifying.

    (k) State-Federal cooperation. In the administration of this chapter the department shall cooperate to the fullest extent, consistent with the provisions of this chapter, with the United States Department of Labor to secure to this State and its citizens all advantages available under the provisions of the Social Security Act (42 U.S.C. §301 et seq.), as amended, the Federal Unemployment Tax Act (26 U.S.C. §3301 et seq.), as amended, and the Wagner-Peyser Act (29 U.S.C. §49 et seq.), as amended; shall make such reports, in such form and containing such information as the United States Secretary of Labor may from time to time require; and shall comply with such provisions as the United States Secretary of Labor may from time to time find necessary to assure the correctness and verification of such reports; and shall comply with the regulations prescribed by the United States Secretary of Labor governing the expenditure of such sums as may be allotted and paid to this State under any of such federal acts.

    Upon request therefor, the department shall furnish to any agency of the United States charged with the administration of public works or assistance through public employment, the name, address, ordinary occupation and employment status of each recipient of benefits and such recipient's rights to further benefits under this chapter.

    The department may afford reasonable cooperation with every agency of the United States charged with the administration of any unemployment insurance law.

    The department is authorized to make such investigations and exercise such of the other powers provided herein with respect to the administration of this chapter and to transmit such information and make available such services and facilities to the agency charged with the administration of any State or federal unemployment insurance or public employment service law as it deems necessary or appropriate to facilitate the administration of such law and to accept and utilize information, services and facilities made available to this State by such agency.

(cf: P.L.1984, c.24, s.8)

    3. This act shall take effect immediately and shall apply to all hearings held before the division, an appeal tribunal or the board of review on or after the effective date of this act.

STATEMENT

    This bill requires the Department of Labor to preserve all records, reports, hearing tapes and transcripts concerning a disputed unemployment compensation benefit claim for a period of two years after the completion of the final appeal hearing. Under the current law, all records, reports and other information obtained from employers and employees cannot be subject to subpoena and be admitted into evidence in any civil action or proceeding other than one arising under the "unemployment compensation law." This bill removes this prohibition. The bill also provides that if an interested party seeks to admit any record, report, hearing tape or transcript into evidence in any civil action or proceeding, the divisions shall provide the requested material within 30 days of the receipt of the written request by the interested party.

    The bill further requires that the Division of Unemployment and Temporary Disability Insurance give notice to all parties 30 days prior to the destruction of the records, reports, hearing tapes or transcripts and supply an interested party with a copy of any record requested at that time.

    An interested party making a request for any record may be assessed with the actual costs of reproducing a copy of the records, reports, hearing tapes or transcripts.

    The bill shall apply to all hearings held before the division, an appeal tribunal or the board of review on or after the effective date of the bill.

Requires DOL to preserve all records concerning disputed unemployment compensation claims for two years and to release records for use in civil actions.