Unemployment Discrimination

Misclassification of Employees Leads to Unpaid Unemployment & Missed Disability Contributions

August 9, 2022 | Smith Eibeler LLC

Last week, in the case of East Bay Drywall, LLC v. Department of Labor and Workforce Development, the State Supreme Court upheld a determination by the Commissioner of the Department of Labor and Workforce Development (DOL) that a drywall company had been misclassifying employees as independent contractors for several years, and as a result, now owes tens of thousands of dollars in unpaid unemployment and temporary disability contributions. The Court analyzed New Jersey’s Unemployment Compensation Law, N.J.S.A. 43:21-19(i)(6)(A)-(C), colloquially known as the “ABC test” to determine whether the workers were properly classified as employees or independent contractors.

East Bay Drywall is an installation business that bids for projects and then hires subcontractors to complete those projects. Each subcontractor is hired on a per job basis and can bring on as many workers as necessary to complete the job. East Bay Drywall provides the raw materials for the work and the workers bring their own tools and perform the labor. Ultimately, East Bay is responsible for the completed project.

Up until June 30, 2013, East Bay had been reporting employee wages to the DOL. In 2016, an audit was commenced to review the company’s classification of workers it hired between 2013 and 2016, when it was no longer reporting wages. The DOL’s auditor found that four individuals and twelve business entities that had worked for East Bay during that time were improperly classified as independent contractors, and informed East Bay that it owed $42,120.79 in unpaid unemployment and short-term disability contributions. East Bay contested the audit in New Jersey’s Office of Administrative Law, where a judge concluded that only three workers had been misclassified and the other thirteen were in fact independent contractors. However, the final decision still rested with the DOL Commissioner, who ultimately upheld the findings of the audit. The Commissioner found that all sixteen workers at issue were East Bay employees under the ABC test. The company appealed, and the Appellate Division affirmed the Commissioner’s determination as to only five of the workers, finding that the other eleven were independent contractors. The Supreme Court granted certification.

Can I Collect Benefits Due to Corona Virus-Related Layoff or Business Closing?

March 15, 2020 | Smith Eibeler LLC

Many businesses and schools have or will be closing due to the Corona-Virus. While some New Jersey workers can still perform their job duties and responsibilities from home, others cannot and will be temporarily or permanently separated from their employment. For those people who are separated from their employment for COVID-19 related reasons, there are various local, state or federal governmental run programs that provide for paid benefits to impacted workers. For New Jersey employees who find themselves unemployed due to COVID-19, they two programs that could provide for temporary relief are New Jersey Unemployment Insurance and the “Emergency Paid Leave Act of 2020” program that was passed into law late Friday night.

New Jersey Unemployment Insurance Law provides for unemployment benefits for employees who are separated from their work due to no fault of their own. Employees who are unable to perform their job duties and responsibilities at home during a Corona-Virus related business closing may be eligible to collect unemployment benefits if they meet all other eligible requirements, including the minimum earnings requirement. Benefits under the New Jersey Unemployment Insurance program are available up to 26 weeks per year. Eligible employees are paid 60% of his or her average weekly wage earned during the base year, with a maximum week benefit up to $713. The current maximum total benefit for one worker to receive is $18,538 for 26 weeks of unemployment.

Workers who become eligible to receive unemployment benefits are required to be show they are (1) able to work; (2) actively seeking work; (3) available for work: and did not refuse any offer of suitable work. While securing a new job during the Corona-Virus pandemic could prove very difficult, any person collecting unemployment benefits should still actively seek for work during their period of unemployment. This includes applying for any open and available jobs and keeping all documentation to prove he or she conducted a diligent job search efforts should the Department of Labor request the information relating to the job search.

What is “Misconduct” under New Jersey Unemployment Law?

October 15, 2018 | Smith Eibeler LLC

On August 24, 2018, New Jersey has passed Bill A-3871, which amends N.J.S.A. 43:21-5 of the New Jersey Unemployment Insurance Law by eliminating the severe misconduct disqualification as well as other changes to New Jersey unemployment laws. One of the key changes in the bill is revising the definition of legal definition of what constitutes misconduct, along with modifying the misconduct disqualification period for misconduct was also changed in the new law from 7 weeks to 5 weeks.

Under the new unemployment law, misconduct is now defined as follows:

[b]ehavior, other than gross misconduct, conduct which is improper, connected with the individual’s work, malicious, within the individual’s control, not a good faith error of judgment or discretion, and is either a deliberate refusal without good cause, to comply with the employer’s lawful and reasonable rules made known to the employee or a deliberate disregard of standards of behavior the employer has a reasonable right to expect, including reasonable safety standards and reasonable standards for a workplace free of drug and substance abuse.

Appellate Division Remands Employee’s Unemployment Appeal Dismissed For Failing to Register For Appeal Tribunal Hearing

September 13, 2018 | Smith Eibeler LLC

A New Jersey Appellate Division has reversed a Board of Review decision denying an employee the right to have an appeal hearing after failing to register and appear for the scheduled appeal hearing. This decision stems from the Department of Labor, Unemployment Division, recent change in its procedures that now requires the employee and employer to pre-register one day before the scheduled hearing before the Appeal Tribunal. In this case, the employee’s unemployment appeal was dismissed without any opportunity to have an appeal hearing because of the employee’s failure to call and register.

In the case entitled Jeff Randall v. Board of Review and D&C Tire Pros, Inc., the claimant, Mr. Randall filed his claim for unemployment benefits in January, 2017 as a result of the termination of his employment with D&C Tire Pros, Inc. The initial determination disqualified Mr. Randall from receiving unemployment benefits by finding that Mr. Randall was discharged for simple misconduct in connection with the work. The simple misconduct determination resulted in disqualifying Mr. Randall from receiving unemployment benefits from the period January 22, 2017 through March 18, 2017. Mr. Randall appealed the Deputy’s initial determination to the Appeal Tribunal by arguing that he was not terminated from his employment due to simple misconduct connected with the work.

In response to his appeal, Mr. Randall received a Notice of Telephone Hearing to take place on April 6, 2017 before an Appeal Tribunal Hearing Examiner. The Notice of Telephone Hearing reads as follows:

NEW JERSEY BILL LOOKS TO FINALLY DEFINE THE DIFFERENCE BETWEEN “SIMPLE MISCONDUCT” AND “SEVERE MISCONDUCT” IN NEW JERSEY UNEMPLOYMENT COMPENSATION LAW

November 30, 2012 | Smith Eibeler LLC

In 2010, Governor Christie and the New Jersey state legislature revised New Jersey Unemployment Compensation Law to include a new “severe misconduct” standard to disqualify certain employees from receiving unemployment benefits. Because of the ambiguity of the statutory revisions to the revised law, New Jersey unemployment lawyers, claims examiners, employers and employees have been left without clear guidance as the difference between being terminated for “severe misconduct” versus the “simple misconduct.”

The revised New Jersey Unemployment Compensation Law did not change the definition of simple misconduct. Simple misconduct is defined as actions that are improper, intentional, connected with one’s work, malicious and within the applicant’s control and is either a deliberate violation of his or her employer’s rules or a disregard to standards of behavior that the employer has the right to expect of the applicant. A simple misconduct disqualification will prevent an applicant from receiving unemployment benefits for the week of the termination and the subsequent seven weeks.

The major change contained in the revised legislation was to include a new “severe misconduct” category for disqualification of unemployment benefits. Under the revised law, being terminated for “severe misconduct” will disqualify a claimant from receiving unemployment benefits indefinitely or until he or she becomes re-employed, works for four weeks, earns at least six times their weekly benefit amount and is terminated from that employment due to no fault of their own. The problem with the enactment of the new “severe misconduct” standard is that it is completely void of a definition of what constitutes “severe misconduct.” Instead, the revised statute only sets forth “examples” of “severe misconduct” that include the following: repeated violations of an employer’s rule or policy, repeated lateness or absences after the applicant receives a written warning from their employer, falsification of records, physical assault or threats that do not constitute gross misconduct, misuse of benefits or sick time, abuse of leave, theft of company property, excessive use of drugs/alcohol on the job, theft of time, or where the behavior is malicious and deliberate but is not considered gross misconduct.

American Jobs Act Proposes Banning Unemployment Discrimination

September 26, 2011 | Smith Eibeler LLC

President Obama’s American Jobs Act proposes making it illegal to discriminate in employment on the basis of an individual’s unemployment status. As you may have suspected, this part of the bill has received support and criticism from both sides of the political spectrum.

Those who support the bill argue that workers who have lost their job due to no fault of their own should not be foreclosed from job opportunities on this basis alone. A leading proponent of passing a law to prohibit unemployment discrimination is the National Employment Law Project (“NELP”), who published a Brief Paper on July 12, 2011, entitled Hiring Discrimination Against the Unemployed: Federal Bill Outlaws Excluding the Unemployed From Job Opportunities, as Discriminatory Ads Persist. The NELP believes that it is unfair, counterproductive and inconsistent with our nation’s values to permit open discrimination against the unemployed.

The NELP researched how prevalent open discrimination against the unemployed has become and identified a number of reputable employers and job placement firms who are openly advertising their exclusion of the unemployed in their employment ads. For example, a position with Allstate Insurance requires that the applicant “must be currently employed” and a position with Kelly Services that requires the applicant to be “currently employed.” The NELP believes that the bill has public support, citing to a recent poll conducted by the Hart Research Associates in June, 2011, that 90 percent of the respondents believe that the refusal to consider an unemployed job applicant as unfair.