Unemployment Insurance

Author: Laurie Ehlbeck Date: May 18, 2011

Legislation that will lead to a more graduated increase in the unemployment tax on small businesses is welcomed and long overdue, according to the National Federation of Independent Business (NFIB).

“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.
The full Assembly voted today 76-0 to pass A-3819, which NFIB strongly supports. It would 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 this year $300 per employee, a heavy blow for small firms with weakened balance sheets. If the bill becomes law, small businesses will pay $100 per employee this year with additional increases in subsequent years.
“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.
The bill now goes to the Senate Labor Committee for consideration.
For more information about NFIB, please visit

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