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Claimant Not Required to Repay Unemployment Compensation Benefits Improperly Paid to Him

The New Jersey Appellate Division recently reversed a decision of the Appeal Tribunal and Board of Review finding the claimant was not liable to refund improperly paid unemployment benefits in the amount $24,676. The Appeal Tribunal and Board of Review previously found that the claimant’s receipt of unemployment benefits were invalid because New Jersey unemployment benefits law prohibits the claimant from included his elected position in the base period to determine his eligibility for benefits. The Court disagreed that based upon non-fraudulent nature of the overpayment of the unemployment benefits, the claimant should not be required to repay the unemployment benefits he collected in the amount of $24,676.

In Eckensberger v. Board of Review, the claimant Mr. Dale Eckensberger, Sr. worked as an elected paid fire commissioner in the Township of Woodbridge (Woodbridge) from March 2005 through March 2008. Mr. Eckensberger simultaneously worked as a janitor at Iseling Chemical Hook & Ladder Co. until February 2008. On May 11, 2008, Mr. Eckensberger filed for unemployment compensation benefits, was found eligible for benefits without disqualification and received such benefits from May 17, 2008 to March 20, 2010. Mr. Eckensberger established a regular base year for his benefits from January 1, 2007 through December 31, 2007, taking into account both his work as a Woodbridge fire commissioner and as a janitor for Iseling Chemical Hook & Ladder Co. However, during that one-year period, he only worked for Iseling eight weeks and earned a total of $3374. On September 22, 2009, Mr. Eckensberger filed for Social Security disability benefits and was deemed disabled on August 1, 2009, eligible to receive disability benefits starting January 2010.

Woodbridge appealed the Board’s decision as to Mr. Eckensberger’s unemployment benefits on November 21, 2009. The Appeal Tribunal found that under New Jersey’s Unemployment Compensation Law (N.J.S.A. 43: 21-1 to 24.30), a claimant’s employment as an elected official could not be considered in a determination for unemployment benefits. On October 27, 2010, Mr. Eckensberger’s unemployment claim was deemed invalid because his position as an elected Woodbridge fire commissioner had been considered in the determination. The Director of the Division of Unemployment Compensation issued a request for refund in the amount of $24,676.

In reviewing the New Jersey unemployment benefits determination, the Appellate Division stated a claimant is liable to repay unemployment benefits if they were received fraudulently, through non-fraudulent nondisclosure or misrepresentation, or for any other reasons while the claimant was not eligible for benefits (N.J.S.A. 43:21-16(d)). Here, Mr. Eckensberger may be permitted a waiver of the repayment obligation because the overpayment was non-fraudulent and he is disabled and no longer to work. New Jersey unemployment benefits law allows the Director to waive a repayment obligation for those reasons or if a claimant would face economic hardship despite a reasonable repayment schedule.

In light of the non-fraudulent nature of Mr. Eckensberger’s overpayment and his current disability status, the Appellate Division remanded the case to the Director to render a final decision on Mr. Eckensberger’s waiver request within sixty days.