TRENTON, NJ – To continue supporting our small businesses impacted by the COVID-19 pandemic, Governor Phil Murphy on Monday signed legislation to reduce businesses’ unemployment insurance (UI) contribution rate for a period of time.
“COVID-19 continues to pose economic challenges to businesses across the state,” said Governor Murphy. “Today’s bill signing will alleviate the financial burdens many businesses are facing and help them get back on their feet during this difficult time.”
This legislation (A-4853/S-3011) will reduce the amount of an employer’s unemployment taxes through Fiscal Year 2023. Additionally, the bill will permit nonprofit and governmental employers that elect to make UI payments equal to the full amount of benefits paid to individuals attributable to service in the employ of the nonprofit or governmental employer to reduce their UI benefit payments by fifty percent for the duration of the public health emergency. The bill will result in cost savings to State entities, public institutions of higher education, local governments, and school districts during the pandemic. The short-term savings will be made possible by federal unemployment insurance advances. The recently enacted federal stimulus package extended interest free borrowing of these loans through March 14, 2021. As of December 17, 2020, 20 states and the U.S. Virgin Islands have availed themselves of these loans.
“The contributions New Jersey employers have made to our Unemployment Trust Fund have helped keep a record number of workers afloat during this pandemic,” said Labor Commissioner Robert Asaro-Angelo. “This new law will help reduce further hardship on employers, while protecting the vital lifeline of unemployment for the future.”
“Many New Jersey businesses are struggling right now, and we cannot allow them to be further penalized by a rise in Unemployment Insurance costs when layoffs were the only option for them to save their business,” said Senate President Steve Sweeney. “This law will be influential in preventing further economic damage to our businesses and communities.”
Business groups across the state praised the measure and commended Governor Murphy and the Legislature.
“A similar phase-in payroll tax measure was utilized after the financial crisis of 2007-2009,” said Michael Egenton, Executive Vice President of Government Relations for the New Jersey State Chamber of Commerce. “This legislation will provide predictability and certainty to employers, especially during these challenging economic times due to the pandemic. Rather than move businesses into the most expensive of six columns to replenish the unemployment insurance fund, the bill will shift them one column over instead of five this July. Additionally, this bill prevents a rate increase for employers who had to carry out layoffs through no fault of their own. We commend the Governor, Senate President Sweeney, Assembly Speaker Coughlin, and the sponsors – Senator Madden and Assembly Majority Leader Greenwald – for their support in making sure our employers do not experience “sticker shock” as we all work towards replenishing the UI fund.”
“The CCSNJ commends Governor Murphy for signing this vital piece of legislation,” said Christina Renna, President and CEO of the Chamber of Commerce Southern New Jersey. “With most businesses having to temporarily close their doors to help slow the spread of COVID-19, employers were forced to make tough choices in order to survive. An additional increase to the employer contribution of the UI Fund would have been a tax increase businesses did not deserve and could not afford as the pandemic continues. Thank you to the Governor and Legislature for recognizing and taking swift action to assure employers were not faced with this difficult burden.”
Follow us on Facebook and sign up for TAPinto Bordentown E-News alerts to be the first to read about all things local!
Download the FREE TAPinto App! Click here for Android – Click here for iOS for breaking news, traffic/weather alerts and special offers.
Know a story we should share with readers? Email Editors Elizabeth Meyers and Kristin Antonello and tell them about it.