ASSEMBLY, No. 2278







By Assemblymen GEIST and ROMA



An Act concerning withholdings and deductions from unemployment compensation benefits and amending R.S. 43:21-15.


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


    1. R.S. 43:21-15 is amended to read as follows:

    43:21-15. (a) Waiver of rights void. Any agreement by an individual to waive, release, or commute his rights to benefits or any other rights under this chapter shall be void. No agreement by any individual in the employ of any person or concern to pay all or any portion of an employer's contributions, required under this chapter from such employer, shall be valid. No employer shall directly or indirectly make or require or accept any deduction from the remuneration of any individual in his employ to finance the employer's contributions required from him, or require or accept any waiver of any right hereunder by any individual in his employ. Any employer or officer or agent of an employer who violates any provision of this subsection shall, for each offense, be fined not less than one hundred dollars ($100.00) nor more than one thousand dollars ($1,000.00) or be imprisoned for not more than six months, or both.

    (b) Limitation of fees. No individual claiming benefits shall be charged fees of any kind in any proceeding under this chapter by the [commission] division or its representatives or by any court or any officer thereof. Any individual claiming benefits in any proceeding before the board of review or a court may be represented by counsel or other duly authorized agent; but no such counsel or agents shall either charge or receive for such services more than an amount approved by the board of review. Any person who violates any provision of this subsection shall, for each such offense, be fined not less than fifty dollars ($50.00) nor more than five hundred dollars ($500.00), or imprisoned for not more than six months, or both.

    (c) No assignment of benefits; exemptions. Any assignment, pledge, or encumbrance of any right to benefits which are or may become due or payable under this chapter shall be void; and such rights to benefits shall be exempt from levy, execution, attachment, or any other remedy whatsoever provided for the collection of debt; and benefits received by any individual, so long as they are not mingled with other funds of the recipient, shall be exempt from any remedy whatsoever for the collection of all debts except debts incurred for necessaries furnished to such individual or his [spouse or] dependents during the time when such individual was unemployed. Any waiver of any exemption provided for in this subsection shall be void.

    (d) Notwithstanding the provisions of subsection (c) of this section:

    (1) an individual filing a new claim for unemployment compensation on or after January 1, 1997 shall, at the time of filing that claim, be advised in writing that:

    (A) unemployment compensation is subject to federal income tax;

    (B) requirements exist pertaining to estimated tax payments;

    (C) the individual may elect to have federal income tax deducted and withheld from the individual's payment of unemployment compensation at the amount specified in the Internal Revenue Code;

    (D) the individual shall be permitted to change a previously elected withholding status.

    (2) amounts deducted and withheld from unemployment compensation pursuant to this subsection (d) shall remain in the unemployment compensation fund until transferred to the federal taxing authority as a payment of income tax;

    (3) the commissioner shall follow all procedures specified by the United States Department of Labor and the Internal Revenue Service pertaining to the deducting and withholding of income tax;

    (4) amounts shall be deducted and withheld pursuant to this subsection only after amounts are deducted and withheld for any overpayments of unemployment compensation, child support obligations, food stamp over issuances or any other amounts required to be deducted and withheld under federal law.

(cf: R.S. 43:21-15)


    2. This act shall take effect January 1, 1997.





    This bill amends the "unemployment compensation law" to comply with provisions of federal law regarding the voluntary withholding of federal income tax from unemployment compensation benefits. Although unemployment compensation benefits are currently subject to federal income tax, this bill would make the payment of such taxes more convenient for those taxpayers receiving benefits.

    Pursuant to Pub.L. 103-465, (26 U.S.C. § 3304 and 3402(p)), formally entitled the "Uruguay Round Agreements Act," but more commonly known as the "General Agreement on Tariff and Trade" or "GATT," effective January 1, 1997, all states must advise individuals filing a new or continuing claim for unemployment compensation benefits that such benefits are subject to federal income tax. Moreover, all states must deduct and withhold Federal income tax from unemployment compensation benefits if the individual receiving such benefits voluntarily requests such deduction and withholding.

    In addition, the bill further amends the "unemployment compensation law" to conform with federal regulations which hold that unemployment compensation may be garnished for child support payments, but not for spousal support.




Concerns withholdings and deductions from unemployment compensation benefits.