New Jersey updates PEO reporting rules amid calls for legislative adjustments

The New Jersey legislation S2357, enacted in November 2022 as P.L. 2022, c. 120, came into effect on July 31, 2023. This law modifies the reporting requirements for professional employer organizations (PEOs) concerning employee separations. The Department of Labor and Workforce Development is currently developing guidance to assist employers, including third-party administrators (TPAs) and PEOs.

Under the new regulations, when an employee separates from their employer, notification must be given "immediately and simultaneously" to the New Jersey Department of Labor & Workforce Development's Division of Unemployment Insurance. Employers are also required to provide a separation notice (BC-10) and a new form issued by the department to determine unemployment benefit eligibility.

The responsibility for reporting this information lies with both the worksite employer/client company and the PEO. However, since worksite employers often possess the necessary details about separations that may not be immediately shared with PEOs, NAPEO is advocating for legislative changes through bill S3773 to shift this responsibility solely to client companies.

NAPEO's proposed bill has passed the Senate Labor Committee without issues but still requires sponsorship for an Assembly companion bill before January 2026 when New Jersey’s current legislative session concludes.

Employers must conduct all communications electronically since July 31, 2023. Non-compliance could result in fines amounting to $500 or 25% of any fraudulently withheld amount.

For those seeking further guidance on these changes, resources are available on the New Jersey Department of Labor and Workforce Development website under “FAQs about new changes to the NJ Unemployment Compensation Law (P.L. 2022, c. 120; S2357).”

PEOs are advised to maintain their existing operations while awaiting detailed instructions from the Department regarding compliance with these new requirements.

Goldberg Segalla offers assistance for businesses impacted by these changes through their Workers’ Compensation or Professional Employer Organizations practice groups.