Legislation to protect New Jersey’s unemployment benefit fund for workers while helping business was signed into law by Governor Christie. This long overdue law will lead to a more graduated increase in the unemployment tax on small business and was strongly supported by NFIB/NJ.
“These are important reforms because they stabilize the system without shocking the small business sector, which is still struggling through a weak economy,” said New Jersey Director Laurie Ehlbeck.
This law will phase in over three years an automatic increase in the payroll tax imposed on employers to fund the system. Without the legislation, small businesses would have to pay] an additional $300 or more per employee, a heavy blow for small firms with weakened balance sheets. Passage of this legislation is expected to save New Jersey business over $450 million.
“The legislation recognizes that small businesses did not create the crisis,” said Ehlbeck. “The fund was depleted over the years, first by previous governors as a way to balance their budgets, and then as a result of higher unemployment caused by the recession.”
Ehlbeck served on Governor Chris Christie’s special task force on unemployment insurance reform. The bill, which is based on the group’s recommendations, is expected to save businesses $450 million statewide, according to Ehlbeck.
“That’s especially important for small businesses, which can now use that money to weather the rest of the storm and invest for the long term,” said Ehlbeck. “It will allow small businesses to hire new workers sooner rather than later, which is a very good thing for New Jersey’s economy.”
Additionally, the legislation modifies the unemployment tax structure in a way that makes future increases less likely.
“The legislation allows the unemployment trust fund to build stronger reserves so that it can withstand future economic volatility without triggering a need for higher taxes on businesses,” said Ehlbeck.