Official Site of The State of New Jersey

If you are an employer subject to the law, you must file an “Employer Report of Wages Paid” (WR-30) form within 30 days of the end of each calendar quarter. This report requires you to list all individuals who were employed by and/or received remuneration from you as employees during the calendar quarter. Since we use the data supplied by employers on Form WR-30 to determine eligibility for New Jersey unemployment and temporary disability benefits, it is imperative that only remuneration for services rendered in New Jersey be included on that form. Wages paid for services performed in other states should be reported to those states. When determining the proper state to report remuneration to, please refer the "Multiple State Employment" section here.

Information required includes (1) employee Social Security number, (2) employee name, (3) gross wages paid, and (4) base weeks earned.

Gross wages paid are to be reported using the definition described in here.

Exception: Domestic employers (those who employ only household workers) are required to file all four quarterly WR-30 reports together with one NJ-927 report on an annual basis, due on January 30 of the following year. (Example: All wages paid in the calendar year of 2019 must be reported and filed on four quarterly WR-30 reports with one NJ-927 showing total wages, by January 30, 2020.)

A base week is any calendar week (Sunday through Saturday) in the reporting quarter during which the employee earned in employment remuneration equal to or more than 20 times the state hourly minimum wage ($169.00 in 2018, $172.00 in 2019, $200.00 in 2020, $220.00 in 2021, $240.00 in 2022, $260.00 in 2023).

Payments made to employees for vacation, sick, or other paid leave during the quarter are to be reported as part of wages paid during that quarter. Earnings and, therefore, base weeks are credited when the leave is actually taken, which may or may not occur within the same quarter as the payment.

Termination or separation payments made to an employee in lieu of notice continue the employment relationship and should be reported as a base week. In such an instance, the actual base week would occur in the week or weeks following the last day that was worked. Severance payments made under contractual obligations, custom or company policy do not extend the employment relationship and are not counted as a base week. These payments are reported on Form WR-30, and the entry for number of base weeks is zero.

Commissions or bonuses are reported as part of wages for the quarter when they are actually paid. These earnings may be used in base week calculations if (1) the payments can be directly attributable to earnings of a specific calendar week, or specific calendar weeks, and (2) such additional earnings would only then increase the existing earnings for affected calendar week(s) above the minimum amount required to constitute a base week.

All employers must file their quarterly wage reporting information (Form WR-30) electronically either online here or by Secure File Transfer Protocol (SFTP). No employers will receive pre-printed WR-30 reports or reminders of due dates.
 
You may view instructions for completing the WR-30 report online by choosing “Help” at the bottom of the (online) page. Read the instructions carefully before completing each quarter’s report. When filing, please ensure that all columns are completed.

Filing the WR-30 by SFTP technology will require authorization. Submit a “Request For Authorization to Report Electronically”, available on the forms page online here. All types of magnetic media—including tape, cartridge, diskette and CD and e-mail attachment—have now been phased out. For more information about SFTP filing, contact Axway.Admin@treas.nj.gov or 609-292-8720.

The following penalties will be assessed against employers based on the number of employees who were not reported; were not reported by the due date; were not reported completely and accurately; and/or who were not reported on electronic media when required:

• For the first failure for one quarter, in any eight consecutive quarters, $5.00 per employee;
• For the second failure for any quarter, in any eight consecutive quarters, $10.00 per employee;
• For the third or any subsequent failure(s) for any quarter, in any eight consecutive quarters, $25.00 per employee.

Employers may amend the WR-30 report either online here or by Secure File Transfer Protocol (SFTP).

For instructions on amending the WR-30 report, choose “Help” at the bottom of the page of the online report.

If you are employing, or expect to employ, one or more workers, you should notify the Division of Employer Accounts. This Division will determine whether you are subject to the Unemployment Compensation law. Under the law it is your responsibility to make the fact known. Once you determine that you are an employer, register your business online here.

If you start a business and employ one or more individuals and pay wages of $1,000 or more in a calendar year, you may be subject to the law.

If you acquire the organization, trade or business, or substantially all the assets of an employing unit that is already subject to the law, you immediately become a subject employer.

If you are subject to the provisions of the Federal Unemployment Tax Act, you automatically become subject under the law, unless the services performed are specifically excluded under the New Jersey law. An employing unit is generally subject to FUTA if it had covered employment during some portion of a day in 20 different calendar weeks within the calendar year or had a quarterly payroll of $1,500 or more.

The State of New Jersey and its political subdivisions are subject to the law. In determining liability, consideration is given to the following.

Independent Contractors

Whenever services are performed for remuneration (including commissions, bonuses and the cash value of compensation in kind), the question of whether such services are considered as performed by an independent subcontractor or a covered employee is determined by application of the three tests of Section 19(i) (6) (A), (B) and (C) of the New Jersey Unemployment Compensation Law.

All remunerated services performed by an individual are deemed to be employment, unless it is established to the satisfaction of the Department that:

• “Such individual has been and will continue to be free from control or direction over the performance of such service, both under his contract of service and in fact;” and
• “Such service is either outside the usual course of the business for which such service is performed, or that such service is performed outside of all the places of business of the enterprise for which such service is performed.” This is a two-part test and satisfaction of either part will meet the requirement. Service that is essential to the nature of the business does not meet the first part of this test, regardless of whether any employee performs the same type of service. If there is no fixed place of business, services performed in whole or in part at a temporary work site or an area where customers or prospective customers are located will not meet the second part of this test; and
• “Such individual is customarily engaged in an independently established trade, occupation, profession or business.” This requires the individual’s business activity to exist and continue to exist independently of, and apart from, the particular service relationship; it must be a stable, lasting enterprise that will survive termination of the relationship.

Multiple-State Employment

When an employee performs services for the same employer in New Jersey and in some other state(s), the question of whether that employee is covered by the New Jersey Unemployment Compensation Law is determined by the tests of Sections 19 (i) (2) (A) and (B). Similar tests exist in the unemployment compensation laws of other states to avoid conflict and overlapping of coverage.

The application of these tests will result in the reporting to one state of the employee’s total wages in all states. The tests are to be applied to the employee, not to the employer, in the following order: (A) localization of service; (B) base of operations; (C) place of direction and control; (D) residence of employee.

Localization of Service Test

To determine jurisdiction of coverage, we first determine whether the service is localized in any state. Service is reportable to the state in which it is localized; if the service is localized in one state, it is unnecessary to apply any other test. Localization occurs when all service is performed in one state, or when all service with the exception of incidental out-of-state service is performed in one state. Service is considered incidental if it is temporary or transitory in nature, or consists of isolated transactions.

Base of Operations Test

If an individual’s service is not localized in any state, we must apply the second test: Are any services performed in the state in which the individual’s base of operations is located? Services that are not localized in any state are reportable to the state serving as the employee’s base of operations, provided that some services are performed in that state. Base of operations is the place or fixed center of more or less permanent nature, from which the employee starts work and customarily returns to in order to accomplish any of the following:

• receive instructions from the employer;
• receive instructions from customers or other persons;
• replenish stocks and materials;
• repair equipment;
• perform any other functions necessary to the exercise of the particular trade or business.

Place From Which Service is Directed and Controlled Test

If jurisdiction cannot be established using the localization of service test or the base of operations test, services are reportable to the state from which the employer exercises direction and control over the employee, provided that the employee performs some services in that state. The place from which an employer directs and controls an individual’s service is the place from which the employer’s basic authority and general control emanate.

Place of Residence Test

If coverage cannot be determined by any of the above tests, it is necessary to apply the test of residence. Residence is a factor in determining coverage only when the individual’s service is not localized in any state and no service is performed in the state that serves either as the employee’s base of operations (if there is such a base) or the place from which the service is directed and controlled. If coverage cannot be established using localization, base of operations, or place of direction and control, services are reportable to the state in which the employee resides, provided that some services are performed in that state.

Exempt Employment

The Unemployment Compensation Law says that certain categories of services are exempt from Unemployment Compensation coverage. However, these services are exempt only if there is a corresponding exemption under the Federal Unemployment Tax Act (FUTA), or if the services are otherwise not subject to tax or coverage under FUTA.

If an employing unit pays remuneration for services not specifically exempted under the provisions of FUTA and seeks exemption from Unemployment Compensation coverage, the employing unit has the burden of proof to show that the services are either exempt from FUTA or otherwise not subject to the tax imposed by FUTA. The Department will hold such class of individuals or type of service in covered employment for New Jersey Unemployment & Disability purposes pending receipt of proof and determination of FUTA exemption.

The following services are exempted from coverage; however, those services outlined below in sections H, M, N, X, and Z are either not specifically excluded from FUTA coverage or are subject to the tax imposed by FUTA. In addition, services performed by “mutual fund brokers or dealers in the sales of mutual fund or securities,” described in J below, are not excluded from FUTA coverage:

Excluded services are certain types of employment which are specifically excluded from coverage by law (R.S. 43:21-19(i)(7)A-Z,(9) & (10). The following services are exempted from coverage; however, those services outlined below in sections H, M, N, X, and Z are either not specifically excluded from FUTA coverage or are subject to the tax imposed by FUTA. In addition, services performed by “mutual fund brokers or dealers in the sales of mutual fund or securities,” described in J below are not excluded from FUTA coverage:

• Agricultural employers: Agricultural labor only if performed in a calendar year for an entity which is not an employer as defined in the "unemployment compensation law," (R.S.43.21-1 et seq.) as of January 1 of such calendar year; or unless performed for an employing unit which
  (i) during a calendar quarter in either the current or the preceding calendar year paid remuneration in cash of $20,000.00 or more to individuals employed in agricultural labor, or
  (ii) for some portion of a day in each of 20 different calendar weeks, whether or not such weeks were consecutive, in either the current or the preceding calendar year, employed in agricultural labor 10 or more individuals, regardless of whether they were employed at the same moment in time;
• Domestic Employers: you are subject to the law if you paid gross cash remuneration of at least $1,000 to domestic labor in a calendar quarter.
• Service performed by an individual in the employ of his son, daughter or spouse, and service performed by a child under the age of 18 in the employ of his father or mother;
• Service performed in the employ of this state or of any political subdivision thereof or of any instrumentality of this state or its political subdivisions, and service in the employ of the South Jersey Port Corporation or its successors;
• Service performed in the employ of any other state or its political subdivisions or of an instrumentality of any other state or states or their political subdivisions to the extent that such instrumentality is with respect to such service exempt under the Constitution of the United States from the tax imposed under the Federal Unemployment Tax Act;
• Service performed in the employ of the United States government or of any instrumentality of the United States unless the Congress of the United States permits coverage;
• Services performed in the employ of fraternal beneficiary societies, orders, or associations operating under the lodge system or for the exclusive benefit of the members of a fraternity itself operating under the lodge system and providing for the payment of life, sick, accident, or other benefits to the members of such society, order, or association, or their dependents;
• Services performed as a member of the board of directors, a board of trustees, a board of managers, or a committee of any bank, building and loan, or savings and loan association, incorporated or organized under the laws of this state or the United States, where such services do not constitute the employment of the individual;
• Service with respect to which unemployment insurance is payable under an unemployment insurance program that is established by an Act of Congress;
• Service performed by agents of mutual fund brokers or dealers in the sale of mutual funds or other securities, by agents of insurance companies, exclusive of industrial insurance agents or by agents of investment companies, if the compensation to such agents for such services is wholly on a commission basis;
• Services performed by real estate salesmen or brokers who are compensated wholly on a commission basis;
• Services performed in the employ of any veterans’ organization chartered by Act of Congress or of any auxiliary thereof, no part of the net earnings of which organization, or auxiliary thereof, inures to the benefit of any private shareholder or individual;
• Service performed for or in behalf of the owner or operator of any theater, ballroom, amusement hall or other place of entertainment, not in excess of 10 weeks in any calendar year for the same owner or operator, by any leader or musician of a band or orchestra, commonly called a “name band,” entertainer, vaudeville artist, actor, actress, singer or other entertainer;
• Services performed by an individual for a labor union organization, known and recognized as a union local, as a member of a committee or committees reimbursed by the union local for time lost from regular employment, or as a part-time officer of a union local and the remuneration for such services is less than $1,000.00 in a calendar year;
• Services performed in the sale or distribution of merchandise by home-to-home salespersons or by in-the-home demonstrators whose remuneration consists wholly of commissions or commissions and bonuses;
• Service performed in the employ of a foreign government, including service as a consular, non-diplomatic representative, or other officer or employee;
• Service performed in the employ of an instrumentality wholly owned by a foreign government if
  (i) the service is of a character similar to that performed in foreign countries by employees of the United States government or of an instrumentality thereof; and
  (ii) the division finds that the Unites States Secretary of State has certified to the United States Secretary of the Treasury that the foreign government, with respect to whose instrumentality exemption is claimed, grants an equivalent exemption with respect to similar services performed in the foreign country by employees of the United States Government and of instrumentalities thereof;
• Service in the employ of an international organization entitled to enjoy the privileges, exemptions and immunities under the International Organizations Immunities Act (22 U.S.C. s. 288 et seq.);
• Service covered by an election duly approved by an agency charged with the administration of any other state or federal unemployment compensation or employment security law, in accordance with an arrangement pursuant to R.S. 43:21-21 during the effective period of such election;
• Service performed in the employ of a school, college, or university if such service is performed
  (i) by a student enrolled at such school, college, or university on a full-time basis in an educational program or completing such educational program leading to a degree at any of the severally recognized levels; or
  (ii) by the spouse of such a student, if such spouse is advised at the time such spouse commences to perform such service that
  (I) the employment of such spouse to perform such service is provided under a program to provide financial assistance to such student by such school, college, or university; and
  (II) such employment will not be covered by any program of unemployment insurance;
• Serviced by an individual who is enrolled at a nonprofit or public educational institution that normally maintains a regular faculty and curriculum and normally has a regularly organized body of students in attendance at the place where its educational activities are carried on, as a student in a full-time program, taken for credit at such institution, which combines academic instruction with work experience, if such service is an integral part of such program, and such institution has so certified to the employer, except that this subparagraph shall not apply to service performed in a program established for or on behalf of an employer or group of employers;
• Service performed in the employ of a hospital, if such service is performed by a patient of the hospital; service performed as a student nurse in the employ of a hospital or a nurses’ training school by an individual who is enrolled and regularly attending classes in a nurses’ training school approved under the laws of this state; and service performed as an intern in the employ of a hospital by an individual who has completed a four-year course in a medical school approved pursuant to the laws of this state;
• Services performed after the effective date of this amendatory act by agents of mutual benefit associations if the compensation to such agents for such services is wholly on a commission basis;
• Services performed by operators of motor vehicles weighing 18,000 pounds or more, licensed for commercial use and used for the highway movement of motor freight, who own their equipment or who lease or finance the purchase of their equipment through an entity that is not owned or controlled directly or indirectly by the entity for which the services were performed and who were compensated by receiving a percentage of the gross revenue generated by the transportation move or by a schedule of payment based on the distance and weight of the transportation move;
• Services performed, using facilities provided by a travel agent, by a person, commonly known as an outside travel agent, who acts as an independent contractor, is paid on a commission basis, sets his own work schedule and receives no benefits, sick leave, vacation or other leave from the travel agent owning the facilities.
• Services performed by the owner of a limousine franchise (franchisee) shall not be deemed to be employment subject to the “unemployment compensation law” with regard to the franchisor if:
  • The limousine franchisee is incorporated;
  • The franchisee is subject to regulation by the Interstate Commerce Commission;
  • The limousine franchise exists pursuant to a written franchise arrangement between the franchise and the franchisor as defined by Section 3 of P.L. 1971, c.356 (C.56:10-3); and
  • The franchisee registers with the Department of Labor and Workforce Development and receives an employer registration number.
• Services performed by a legal transcriber, or certified court reporter certified pursuant to P.L. 1940, c.175 (C.45:15B-1 et seq.), shall not be deemed to be employment subject to the "unemployment compensation law," RS.43:21-1 et seq., if those services are provided to a third party by the transcriber or reporter who is referred to the third party pursuant to an agreement with another legal transcriber or legal transcription service, or certified court reporter or court reporting service, on a freelance basis, compensation for which is based upon a fee per transcript page, flat attendance fee, or other flat minimum fee, or combination thereof, set forth in the agreement.

"Legal transcription service" and "legal transcribing" mean making use, by audio, video or voice recording, of a verbatim record of court proceedings, depositions, other judicial proceedings, meetings of boards, agencies, corporations, or other bodies or groups, and causing that record to be printed in readable form or produced on a computer screen in readable form; and "legal transcriber" means a person who engages in "legal transcribing."

Note: If one-half or more of the services in any pay period performed by an individual for an employing unit constitutes employment, all the services of such individual shall be deemed to be employment; but if more than one-half of the service in any pay period performed by an individual for an employing unit does not constitute employment, then none of the service of such individual shall be deemed to be employment.

Public and Nonprofit Institutions

The law exempts certain services if they are performed for public or non-profit institutions exempt under Section 501(c)(3) of the Internal Revenue Code. They are:

• Services performed in the employ of a church or organization operated primarily for religious purposes. As of May 26, 1981, this exemption includes church-related elementary and secondary schools; that is, schools operated under the corporate charter of a church or other formal religious groups. However, any such group may elect coverage for its employees by contacting the Department of Labor and Workforce Development, Division of Employer Accounts, Employer Status Section, PO Box 397, Trenton, New Jersey 08625-0397. Services performed by a duly ordained minister, priest or member of a religious order in the exercise of duties required of such order.
• Services performed in a facility for rehabilitation by a person receiving rehabilitation.

Services performed as part of work relief or work training program by a person receiving the training.

If you employ any person(s) performing services you think may be exempt, contact any Regional Office for guidance. You may request a written opinion by writing to the Chief Auditor, Division of Employer Accounts, PO Box 942, Trenton, New Jersey 08625-0942. E-mail the chief auditor.

Do not attempt to make your own determination. It may be wrong. If it is, it could cost you money in the form of interest and penalties.

Special Employers

Under certain circumstances, a crew leader who provides a crew to an agricultural employer can be considered the employer of the crew for unemployment tax purposes. The agreement between the crew leader and entity must comply with all federal and state regulations and the crew leader must be registered under the New Jersey Crew Leader Registration Act. For more information contact us here.

If you disagree with the determination of the Division of Employer Accounts, you have the right to protest and request a hearing on the matter. Any such request must be made within 30 days of the date of the notification.

If you are subject to the law and you sell your business, or you do not have anyone working for you now, you may be relieved of your responsibility of filing reports if you so notify the Employer Status Section of the Division of Employer Accounts.

If you are an employer subject to the provisions of the New Jersey Unemployment Compensation Law, you are required to file an Employer’s Quarterly Report for each calendar quarter. As an employer subject to the law, you are also subject to the provisions of the New Jersey Temporary Disability Benefits Law, including the Family Leave Insurance program.

Exceptions

• Domestic employers (those who employ only household workers) file the Employer’s Quarterly Report for Household Workers (Form NJ-927H) only once each year, reporting gross, excess and taxable wages and paying contributions due for each calendar year by January 30 of the next year. This form also allows employers to report and pay gross income tax withheld from workers.

Contributions under the Unemployment Compensation Law are required of all subject employers and covered workers. Contributions under the Temporary Disability Benefits Law are also required if the State Plan of disability insurance is in force.

• Nonprofit organizations exempt under Section 501(c)(3) of the Internal Revenue Code may elect to reimburse the Unemployment Trust Fund for unemployment benefits paid instead of making regular contributions. Learn more here.
• A governmental entity or instrumentality is not automatically subject to the provisions of the state’s Temporary Disability Benefits Law for temporary disability benefits, but may voluntarily elect this coverage. Learn more here. However, these same governmental entities or instrumentalities are automatically subject to the provisions of the state Temporary Disabilities Benefits Law for Family Leave Insurance benefits.
• A governmental entity must reimburse the Unemployment Trust Fund for unemployment benefits paid instead of making regular contributions, but may voluntarily elect to pay contributions, effective January 1 of a calendar year, by filing written notice with the Division of Employer Accounts not later than February 1 of such year. This election must remain in effect for at least two full calendar years and may be terminated by filing written notice not later than February 1 of the year termination is to be effective.

Each monthly employment figure reported on the Employer’s Quarterly Report (Form NJ-927) should represent a count of all full-time and part-time workers covered by the NJ Unemployment Insurance Law who worked during or received pay for the payroll period that includes the 12th of the month. If no workers were employed during the payroll period, enter zero (0) for the month.

The monthly counts reported should not be a restatement of the summary count of employees reported on the Employer Report of Wages Paid (Form WR-30). The summary count from Form WR-30 represents a count of all workers who were employed during the quarter. Monthly employment reported on the Employer’s Quarterly Report reflects payroll counts for the pay period including the 12th of each month. The summary count from the WR-30 will generally be greater than or equal to any of the monthly payroll counts from the NJ-927. At no time should any monthly employment figure reported on the Employer’s Quarterly Report exceed the summary count of employees reported on the Employer Report of Wages Paid for the same quarter.

For questions about reporting monthly employment counts on the Employer’s Quarterly Report (Form NJ-927), contact the Covered Employment Statistics unit at (609) 984-5586 or (609) 984-5589.

The term “wages” as used in this section means every form of remuneration you pay to your employees, either directly or indirectly, including salaries (vacation pay, holiday pay, back pay awards), commissions, tips, and bonuses.

Certain sick leave payments and continuation pay for family leave made by employers to employees for periods of disability are considered wages for both tax and benefit purposes under the Unemployment Compensation and Temporary Disability Benefits laws.

Types of sick leave payments and continuation pay for family leave deemed wages and therefore taxable are:

• Continuation of pay during period of sickness or injury or for periods of family leave
• Payment of the difference between temporary disability benefits paid under the State Plan or an approved private plan and full salary
• Payment of the difference between Workers’ Compensation benefits and full salary
• Payment of unused sick leave made to an employee while still in employment
• Payment of the difference between family leave insurance benefits paid under the State Plan or an approved private plan, and full salary.
• Types of sick leave payments and continuation pay for family leave deemed benefits and therefore not taxable are:
• Benefits paid from the State Plan for temporary disability insurance
• Benefits paid by an insurance carrier under an approved private plan
• Benefits paid by a union under an approved private plan
• Benefits paid by the employer under an approved self-insured private plan
• Benefits paid for work-related injury under Workers’ Compensation
• Benefits paid to employees in the public sector for work-related illness under Sick Leave Injury (SLI)
• Payment of sick leave made after retirement or separation from employment
• Family leave insurance benefits paid from the State Plan
• Family leave insurance benefits paid by an insurance carrier under an approved private plan
• Family leave insurance benefits paid by a union under an approved self-insured private plan
• Family leave insurance benefits paid by the employer under an approved self-insured private plan.

Benefits paid by a private plan employer or an approved self-insured private plan for temporary disability must apply the following rules to determine if payments constitute taxable wages:

• Payments made to employees under an approved private plan are considered taxable remuneration, if payments are for a period of less than seven consecutive days following the date of disability.
• Payments made for periods after the seventh consecutive day following the date of disability are not considered taxable.
• If the period of disability extends to the twenty-second day of disability and payment is made for that twenty-second day, then the first seven days, referred to in (a) above, are not considered taxable.

Family leave insurance benefits payments:

• Family leave insurance benefits payments made to employees under an approved private plan are considered taxable remuneration if the payments are for a period of seven or less consecutive days following the first day that the individual establishes a claim.
• Family leave insurance benefits payments made for periods after the seventh consecutive day following the first day that the individual establishes a claim are not considered taxable remuneration.
• Family leave insurance benefits payments made for seven or less consecutive days following the first day that the individual establishes a claim referred to in (a) above are not considered taxable remuneration when:
  • the period during which family leave insurance benefits have been paid extends to 22 consecutive days, or
  • the claimant is eligible for at least one day of family leave insurance benefits in three separate weeks subsequent to the week in which the claim for family leave insurance benefits was established.

Payments in kind for personal services such as meals, board, lodging or any other payment in kind received by a worker from his/her employing unit in addition to or in lieu of (rather than as a deduction from) money wages are deemed to be remuneration paid by his/her employing unit. The Department of Labor and Workforce Development will determine or approve the cash value of such payments in kind. Such cash value will be used to determine the wages payable or paid to such worker and to compute contributions due under the law.

Money value for board and room, meals and lodging are treated as follows:

• Where a money value for board and room, meals and lodging, or for any such items furnished to a worker is agreed upon in a contract of hire, the amount agreed upon will be deemed the cash value of such item or items.
• The Director will establish rates for board and room, meals and lodging furnished in addition to, or in lieu of, money wages, unless the employer can establish different costs determined by generally accepted accounting principles.
• In accordance with N.J.A.C. 12:16-4.8, the following are the calculated dollar equivalents for board and room, meals and lodging furnished by employers in lieu of money wages paid for services rendered by employees during the calendar year 2023:

If less than three meals per day, individual meals shall be valued as follows:

These amounts are used when the employer does not assign a value to such payments.

Note: These amounts are used for unemployment and temporary disability insurance purposes only when the employer does not assign value to such payments. They have no bearing on the New Jersey Wage and Hour laws or regulations or the federal Fair Labor Standards Act (FLSA) and regulations. Rates for board and room, meals and lodging under the New Jersey Wage and Hour laws or regulations may be found at N.J.A.C. 12:56-8, 12:56-13 and 12:56-14. Under the FLSA, these rates may be found at 29 U.S.C. 201 et seq., and 29 CFR Part 531.

The following types of remuneration are also considered wages:

• Separation pay if made under a contractual obligation or by custom.
• Payment of employees’ portion of federal or state income tax, Social Security tax or unemployment and temporary disability taxes.
• Distributions of income to officers of Subchapter “S” corporations when paid, if the officers performed any services for the corporation.
• Employee payments to IRA or other deferred compensation plans that are withheld from gross remuneration.
• Employer contributions to employees’ cash or deferred arrangements under Internal Revenue Code Section 401(k), to the extent that the employee could have elected to receive cash in lieu of making contributions.
• Employer contributions to a cafeteria plan arrangement pursuant to Section 125 of the Internal Revenue Code is taxable remuneration to the extent that the employee could have elected to receive cash in lieu of the employer making the contribution.
• Employer contributions on behalf of, or reimbursements to, an employee under a Dependent Care Assistance program.
• If a Dependent Care Assistance program is financed by an employee’s voluntary salary reduction, remuneration will be that amount the employee could have received in lieu of making the contribution.
• Remuneration resulting from a below-market interest rate loan is taxable to the extent it is determined to be income for the purposes of FUTA.
• When personal use of a company vehicle is present, the value of such use as determined by Section 61 of the Internal Revenue Code is considered remuneration.
• Residual payments made to entertainers for reuse of commercial recordings are taxable if the original services were performed in this state.
• All wages paid to aliens are taxable and reportable under a valid Social Security number.
• Stock options are taxable to the extent that the employee could elect to receive cash in lieu of them.

The maximum amount of wages on which subject employers must pay taxes is as follows for the periods shown:

The taxable wages change each year. Prior to 01/01/2020, the amounts taxable for UI, Employer DI, Worker DI and FLI were all 28 times the statewide average weekly wage paid to workers subject to the law. As of 01/01/2020, the amounts taxable for UI and Employer DI were 28 times the statewide average weekly wage paid to workers subject to the law while the amounts taxable for Worker DI and FLI were 107 times the statewide average weekly wage paid to workers subject to the law.

The Commissioner of Labor and Workforce Development determines this statewide average wage on or before September 1 of each year.

Supplemental Workforce Fund

Legislation enacted in 2001 established a Supplemental Workforce Fund (SWF) for Basic Skills to provide basic skills training to qualified workers. Effective July 1, 2001, each employer’s unemployment insurance tax rate is reduced by .0175%, with the corresponding reduction paid into the SWF. Effective January 1, 2002, workers’ tax rates are also reduced by .0175%, with this amount paid into the new fund. In the tables in this section and here, the tax rates for the SWF and the Workforce Development Partnership Fund (WF) have been combined.

Employers

Except for employers who become subject due to the “successor” provisions of the law, most new employers are assigned basic “starting” rates. The basic contribution rates for unemployment insurance and State Plan disability insurance coverage are subject to change, depending on the condition of the Unemployment Trust and Disability Benefits Funds, respectively. For a full explanation of contribution rates and experience rating, click here.

New employer rates for Unemployment Insurance (UI), State Plan Temporary Disability Insurance (DI), Workforce Development Partnership (WF), Supplemental Workforce (SWF), and Health Care Subsidy (HC) for the most recent several years click here.

Workers

The workers’ contribution rates and maximum contributions to be deducted for Unemployment Insurance (UI), State Plan Disability Insurance (DI), Workforce Development Partnership (WF), Supplemental Workforce (SWF), and State Plan Family Leave Insurance (FLI) for the most recent several years click here.

Find more information on Family Leave Insurance (FLI), click here.

Governmental entities or instrumentalities that elect to reimburse the cost of benefit payments in lieu of contributions deduct worker contributions of 0.425% of taxable wages. “Governmental reimbursable” employers will remit 0.325% with the Contributions Report, and will deposit from January 1, 2000 through June 30, 2004, 0.1% into the employer’s trust account. Beginning July 1, 2004, government reimbursable employers will remit 0.125% with the Contributions Report, and will deposit 0.3% into the employer’s trust account.

Governmental employers that have elected coverage under New Jersey’s Temporary Disability Benefits Law will continue to remit the full worker contribution along with the employer contribution when filing form NJ-927. Governmental employers covered under the State Plan for Family Leave Insurance will also remit the full worker contribution for family leave. For the most recent several years of worker withholding rates, click here.

Effective the first quarter of 2009, all employers must file the NJ-927 report electronically either online here or by Secure File Transfer Protocol (SFTP) technology. No employer will receive pre-printed reports or reminders of due dates.

You may view instructions for completing the NJ-927 report by choosing “Help” at the bottom of each page of the online report. To see individual line instruction, select the line number of the online report. We recommend that the person responsible for filing the report read these instructions carefully.

Payments must be submitted by Electronic Fund Transfer (EFT), credit card or E-check. Find information about electronic payment options online here.

Employer’s Quarterly Reports (Form NJ-927) are required for the periods ending March 31, June 30, September 30 and December 31 of each year. The reports and the contributions due on the taxable wages shown on the reports must be sent to the Division of Employer Accounts not later than April 30, July 30, October 30, and January 30. This allows you 30 calendar days after the close of the quarter to prepare the report.

Domestic employers should refer here to learn more about annual filing.

If you, as an employer, fail to file the Employer’s Quarterly Report (Form NJ-927), the Division of Employer Accounts may estimate the amount of taxes you owe from any available information, and may assess and collect the taxes due, together with penalties and interest.

It is mandatory that all employers, including reimbursement-option employers, submit these reports. The reporting form must be completed and returned even if you, the employer, have had no payroll in the quarter.

If you file the contribution report late, you will be charged $10.00 a day for each day of delinquency up to and including the fifth day, after which the charge is a penalty of $10.00 a day or 25 percent of the amount of contributions due for the period covered by the report, whichever is less. If you file a contribution report late on which no contributions are due, the maximum penalty is $50.00.

If you fail to pay the contribution when due, the law provides that the amount of the taxes due will carry interest at the rate of 1.25% for each month from the due date until the date payment is received.

Each report should include only the information that pertains to a particular quarter. If you discover that you made an error on a previous report, you can amend the Quarterly Report online here.

If you employ one or more persons for some portion of a day in each of 20 weeks within a calendar year or have a payroll of $1,500 in a calendar quarter, you are subject to the provisions of the Federal Unemployment Tax Act. Employers who pay their taxes on time to the New Jersey Department of Labor and Workforce Development are allowed a credit not to exceed 90 percent of 6.2 percent on the first $7,000 of wages paid to each employee. “On time” means that employers must have paid their taxes due under the New Jersey law by January 31 of the year following the calendar year for which they claim credit. The total allowable credit is 5.4 percent of the gross tax.

New Jersey faces a potential FUTA credit reduction in 2013 of 0.6 percent because of outstanding federal loans.

The Unemployment Trust Fund Reserve Ratio is computed by dividing the balance of the Unemployment Trust Fund as of March 31 of the current calendar year by the total taxable wages reported by all employers for the prior calendar year.

Balance of Unemployment Trust Fund (as of March 31) / Total UC Taxable Wages = Unemployment Trust Fund Reserve Ratio

The Unemployment Trust Fund Reserve Ratio determines which column of rates will be in effect for all employers for the rate year beginning on July 1 of the same year. Since July 1, 1986, New Jersey’s unemployment tax tables have included six columns of rates, labeled columns A, B, C, D, E and E+10%. Column A rates, the lowest rates, are applicable when the fund is highest (3.50% of taxable wages, or greater). Column E+10% rates, the highest rates, are applicable when the fund is lowest (below 1.00% of taxable wages).

The trust fund reserve ratio thresholds that trigger various tax columns are modified as follows:

From January 1, 1998, through June 30, 2001, each employer’s rate, except those with a reserve ratio of negative 35.00%, is decreased by 0.1%, with the corresponding reduction paid into the Workforce Development Partnership Fund. Additionally, from January 1, 1998, through December 31, 1998, each employer’s rate, after the 0.1% reduction, was decreased by 12%, with the corresponding reduction paid into the Health Care Subsidy Fund. For calendar year 1999, the employer’s rate was decreased by 10% and in 2000 by 7%, with the corresponding reduction paid into the Health Care Subsidy Fund. From January 1, 2001, through December 31, 2001, there was no reduction to the employer’s rate for payment into the Health Care Subsidy Fund.

Effective July 1, 2001, each employer’s rate, except those with a reserve ratio of negative 35.00%, is decreased by 0.1175% with the corresponding reduction paid into the Workforce Development/Supplemental Workforce Funds.

From January 1, 2002, through March 31, 2002, each employer’s rate, after the 0.1175% reduction was decreased by 36%, with the corresponding reduction paid to the Health Care Subsidy Fund. From April 1, 2002, through June 30, 2002, the employer’s rate was decreased by 85% and from July 1, 2002, through June 30, 2004, by 15%, with the corresponding reductions paid to the Health Care Subsidy Fund. From July 1, 2004, through June 30, 2005, the employer’s rate was reduced by 7%, with the corresponding reduction paid to the Health Care Subsidy Fund. From July 1, 2005, through December 31, 2005, the employer’s rate was reduced by 16% and from January 1, 2006, through June 30, 2006 by 34%, with the corresponding reductions paid to the Health Care Subsidy Fund. Effective July 1, 2006, the rate reduction and payment to the Health Care Subsidy Fund ended.

The Experience Rating Tax Table illustrates combined employer contribution rates (Unemployment Insurance, Workforce Development, Supplemental Workforce Fund and Health Care Subsidy). This table is followed by applicable tax schedules from July 1, 2012, through June 30, 2018.

“Table B” Unemployment Insurance Contribution Rates (effective July 1, 2018 – June 30, 2019)

“Table C” Unemployment Insurance Contribution Rates (effective July 1, 2016 – June 30, 2018)

“Table E” Unemployment Insurance Contribution Rates (effective July 1, 2012 – June 30, 2016)

Two factors determine an employer’s unemployment tax rate: (1) the Unemployment Trust Fund Reserve Ratio and (2) the Employer’s Reserve Ratio.

New Jersey uses the “reserve ratio” method to determine unemployment tax rates for subject employers. A record is maintained for each employer showing the contributions paid, unemployment benefits charged to that account and taxable wages. The cumulative benefits are subtracted from the cumulative contributions. The resulting value is known as the “Reserve Balance.”

Employer Contributions – Benefits Charged = Reserve Balance

Employer contributions include all payments made as of January 31 of any calendar year. Benefits charged include only those paid to claimants through December 31 of the previous calendar year.

The Reserve Balance is divided by average annual taxable wages (for the last three or five calendar years, whichever is higher) and the product is the “Reserve Ratio.”

Reserve Balance / Average Annual Taxable Wages (last 3 or 5 years) = Reserve Ratio

The employer’s Reserve Ratio will fall within one of the 28 categories as shown in this Experience Rating tax table. After establishing the employer’s Reserve Ratio category and determining which particular schedule of rates is in effect, the employer’s unemployment tax rate can be ascertained.

In some cases, however, an employer’s Reserve Ratio is not used to determine the employer’s combined UI/WF/HC contribution rate. Three such rating categories, and corresponding employer contribution rates, are shown here:

Unemployment Trust Fund Reserve Ratio

New Employer Rate

New Jersey employers are assigned new employer rates until they have established three consecutive full or partial years of contribution payment experience. Effective July 1 of the fourth year of subjectivity, rates are assigned based on the employer’s unemployment experience history.

Specially Assigned Rates (positive) and (3) Specially Assigned Rates (negative)

Specially assigned rates apply to employers who previously had sufficient experience to receive an “experience rate” but subsequently paid no contributions on wages for employment with respect to at least one of the last three calendar years. Category (2) employers have positive Reserve Balances; category (3) employers have negative Reserve Balances.

At the beginning of each fiscal year, any employer whose rate is based on experience may lower his unemployment tax rate by making a voluntary payment to increase his Reserve Ratio. You can do this online here. We must receive your remittance within 30 days of the mailing date of the “Notice of Employer Contribution Rates” and you must meet the requirements stated therein. Voluntary contributions apply only to the employer unemployment insurance rate.

When unemployment insurance benefits are paid to a claimant, a charge equal to the amount of benefits is made to the account of the employer for whom the individual worked. If the claimant worked for more than one employer during the period on which his benefits are based, each base-year employer is charged for each benefit payment in proportion to the amount of wages that the employer paid the claimant during the base-year to total wages received during that period. That is, under proportional charging, all base-year chargeable employers share in the cost of each week of benefit payments.

The employer is notified of these charges quarterly on Form B-187Q, “Unemployment Benefits Charged to Experience Rating Account.” We recommend that employers check these listings carefully with their payroll records to help prevent incorrect charges and improper benefit payments.

When a claimant is determined to be ineligible for or disqualified from unemployment benefits, no associated costs for benefit payments should be reflected on his/her chargeable employer’s (or employers’) B-187Q notice(s) for the period of ineligibility or disqualification. However, a claimant who is separated from employment by either a chargeable base-year employer or a non-chargeable lag-period employer due to voluntary leaving, misconduct or gross misconduct, may become eligible for benefits by fulfilling legally prescribed criteria for removal of these disqualifications. Effective January 4, 1998, an amendment to the New Jersey Unemployment Compensation Law provides for the relief of charges to a contributory employer’s experience rating account when an individual’s separation from employment is for reasons that are disqualifying under the law. Thus, even though an individual may overcome an imposed disqualification or a potential disqualification, and is entitled to receive unemployment benefits, the employer’s account will not be charged for the benefits that occur subsequent to the disqualifying separation. Learn more here.

When the relevant criterion is met in cases involving voluntary leaving or misconduct separation issues, any chargeable employer is notified in writing of the claimant’s potential eligibility for benefits. The cost of any subsequently paid benefits will appear on B-187Q notices mailed to the claimant’s chargeable employer(s). Because a disqualification due to gross misconduct involves the immediate cancellation of wage credits earned with the employer prior to the date of discharge, the employer’s account will not be charged for benefits that are compensable after the claimant re-qualifies.

An employer’s disability tax rate is computed in a manner similar to the unemployment rate. A “reserve ratio” system incorporates (1) the employer’s excess or deficit Reserve Balance percentage, and (2) the condition of the State Disability Benefits Fund.

A record is maintained for each employer showing the State Plan disability benefits charged, contributions paid (both employer and worker) and taxable wages. The benefits are subtracted from the contributions to yield the Reserve Balance.

Contributions (Employer & Worker) – Benefits Charged = Reserved Balance

The contributions are those paid as of January 31. The benefits charged are those paid to claimants as of December 31.

The Reserve Balance is reduced by $500.00 and then divided by the average annual taxable wages (for the last three or five years, whichever is higher) to give the Excess or Deficit Reserve Balance Percentage.

Reserve Balance (Reduced By $500.00) / Average Annual Taxable Wages (last 3 or 5 years) = Excess or Deficit Reserve Balance Percentage

This percentage will determine the preliminary rate, as shown in the table below:

* CR indicates that we have paid out more in benefits to your employees than you have paid in contributions. Such situations result in higher employer rates.

The excess or deficit Reserve percentage is not calculated if:

• There were one or more years during the past three years in which no contributions were paid to the fund, or
• The excess or deficit Reserve Balance is $500.00 or less. The preliminary rate assigned under (1) is 0.50% and under (2) is 0.25%.

The law provides that an employer’s preliminary rate cannot be 0.20% higher nor 0.10% lower than the unadjusted preliminary rate for the prior fiscal year. The preliminary rate is adjusted according to this provision except when the basic rate of 0.50% has been assigned, in which case no adjustment is made.

An employer’s disability rate can be further modified according to the condition of the State Disability Benefits Fund. Depending on the size of the fund reserve percentage, rates can be raised, lowered, or remain unchanged.

If a State Plan disability claim’s base year had more than one subject employer, in most cases a charge equal to the amount of disability benefits paid is made only to the account of the claimant’s most recent subject employer. (This differs from how unemployment benefits are charged.)

The employer is notified of State Plan benefit charges by Form DS-7CR2, “Notice of Disability Benefits Charged or Credited.”

When the entire organization, trade or business, or substantially all the assets of an employer subject to the law are acquired by another entity, the unemployment tax rate of the acquired entity is automatically transferred to the new employer.

When acquiring another employing enterprise, in whole or in part, the employer is required to notify the Employer Status Section of the Division of Employer Accounts.

There are other changes in legal entity that have the same effect as if there were an actual change in ownership from one individual to another. A change of legal entity occurs when a business becomes incorporated, a sole ownership becomes a partnership or a corporation, or if a partnership adds or changes a partner, etc. Whenever there is such a change, the employer should notify the Employer Status section within the Division of Employer Accounts immediately.

If, as a result of employment with two or more employers during a calendar year, a worker had deducted from his/her wages more than the maximum annual contribution amounts for unemployment, temporary disability insurance, family leave insurance, Workforce Development, and Health Care Subsidy purposes, he/she may obtain credit for the excess contributions on his/her New Jersey income tax return. To claim this credit, the worker should obtain Form NJ-2450, “Employee’s Claim for Credit for Excess Unemployment and Disability Contributions,” from the state’s Division of Taxation. The completed Form NJ-2450 should be filed with the New Jersey Gross Income Tax return. Non-New Jersey residents who do not file New Jersey Income Tax returns should file refund Forms UC-9A, W-2 and/or UC-52 directly with the Division of Employer Accounts.

Note: W-2 forms, used by the Division of Taxation to document the payment of excess contributions, must include the employer’s New Jersey taxpayer identification number, must show separately the worker’s contribution amounts for unemployment and temporary disability insurance for the tax year, and, if appropriate, must include the plan number of the approved Private Plan for disability insurance.

Nonprofit organizations that are exempt under 501(c)(3) of the Internal Revenue Code may either pay unemployment contributions on taxable wages on a quarterly basis, or may reimburse the Unemployment Trust Fund for benefits paid. Worker contributions are to be deducted at the rates indicated here, for the Health Care Subsidy Fund, Unemployment Insurance Trust Fund, Workforce Development Partnership Fund, and Family Leave Insurance, and forwarded to the Department of Labor and Workforce Development with the quarterly reports.

A newly subject nonprofit organization that elects to reimburse the Fund for benefits paid must file written notice of its intention with the Division of Employer Accounts within 120 days of the day on which the organization attains subject status, or not later than 30 days from the date on which the organization is notified of its subjectivity, whichever is later. Nonprofit organizations on a contributions schedule may change to a reimbursement basis by filing a written notice to that effect with the Division of Employer Accounts not later than February 1 of any calendar year. Elections to reimburse will be effective for a period of not less than two calendar years.

Two or more employers who are liable for reimbursement of the benefit costs in lieu of contributions may apply to establish a “group account” for the purpose of sharing the cost of benefits paid.

Nonprofit organizations that elect to reimburse the Fund for benefit payments will be required to furnish proof of financial responsibility or file a surety bond with the Department. The amount of the bond or deposit will not exceed the amount derived by multiplying the organization’s taxable wages for the preceding calendar year, or the estimated taxable wages for the ensuing year, whichever is greater, by the maximum unemployment insurance contribution rate in effect at the beginning of the calendar year for which the bond or deposit is required (currently 5.8 percent).

Nonprofit organizations that have elected to make reimbursements of costs for benefits paid that are attributable to base-year wages earned during the reimbursement election period are billed on a quarterly basis.

A nonprofit organization may file a written notice terminating its election, not later than February 1 of any calendar year in which the termination is to become effective.

If an election for reimbursement is terminated by a nonprofit organization or cancelled by the Division of Employer Accounts, the nonprofit organization remains liable for the reimbursement of all benefits paid that were based on wages earned in the employ of the nonprofit organization during the effective period of the election.

As of the effective date of the termination of an election for reimbursement, a nonprofit organization will become liable to pay unemployment insurance contributions on taxable wages paid to its employees subsequent to the termination. Its contribution rate beginning with the first July 1 in the period following the termination will be assigned in accordance with the experience rating provision of the law, except that:

• The benefit charges to its account that are attributable to base-year services during the effective period of the election will not be included in the total benefit charges to its account in the calculation of its reserve balance for determining its rate.
• Its average annual payroll will be determined without inclusion of any of the wages paid in any calendar year during which its election for reimbursement was effective for any part of the calendar year.
• The period during which the election for reimbursement was effective will not be included in calculating the period of eligibility for modification of its rate.
• For the period from the date of termination to July 1 following termination, a rate of 1% will be assigned for contributions under the Unemployment Compensation Law.

Note: The reimbursement option is not available for temporary disability contributions.

The following explanations address frequently asked questions from employers who receive notice of a New Jersey Unemployment Compensation (UC) audit. This information will help you prepare for the audit and let you know what to expect during and after the audit.

The United States Department of Labor requires New Jersey to implement a comprehensive field audit program as an efficient means of ensuring compliance with the New Jersey Unemployment Compensation law and the timely collection of taxes on an equitable basis. Audits are performed to verify your reported payroll and exclusions taken for unemployment compensation purposes, to ensure that benefits have been charged correctly to your account, and to answer any questions you may have regarding the Unemployment Compensation law.

Each year, several thousand employers are selected for audit. Some employers are selected randomly from the entire list of employers covered under the New Jersey UC law to verify that wages are being reported correctly. Others are selected to resolve report delinquencies or benefit claims (both unemployment and temporary disability). If you are not currently covered under New Jersey UC law, we may do an audit to determine if you should be a covered employer for unemployment compensation purposes. The auditor can tell you why you were selected.

The length of time depends on the size of the employer, the condition of the employer’s records, and questionable issues or problems encountered, if any. Some audits take from two to four hours while others may take longer. The auditor will be able to answer this question for you.

Contact the auditor immediately at the telephone number listed on the scheduling letter. We will reschedule the audit if necessary. Please provide several alternate dates when you will be available so that we can reschedule promptly.

You may designate a representative to provide the records to the auditor. That individual should understand your records and be able to answer questions. Your designated representative may be your accountant, bookkeeper or other responsible individual.

Usually, the audit will cover one calendar year unless we discover issues that could affect other years. The scheduling letter lists the time period for which records must be provided. If the audit is not expanded beyond the one-year period, it may not be necessary for the auditor to examine the records of other years.

However, have all requested records available for all years in case they are needed. Records must be retained and readily accessible at the New Jersey place of business for the current calendar year and for the four preceding calendar years per N.J.A.C. 12:16-2.4a.

The records to be examined are listed in the scheduling letter. These include, but are not limited to: payroll records, cash disbursements records, or check books and canceled checks, federal and state tax reports, financial statements, general ledger, corporate minutes book, Form W-3 Transmittal with Forms W-2, and Form 1096 Transmittal with Forms 1099. Not all employers maintain all these records, but those you do maintain must be made available to the auditor.

Furthermore, payments to individuals for personal services will be scrutinized for proper classification as an “independent contractor” or “employee.” Have the following information available for the auditor’s examination: invoices, contracts, agreements, advertisements, business licenses, business telephone listings, business cards and stationery, and the address and telephone listing for each individual receiving such payments.

The auditor must examine a variety of records and documents to verify that payroll was correctly reported for unemployment compensation purposes. Payments for personal services are made differently, and through different accounts, from employer to employer. The auditor is required to scrutinize all records that may show payments to individuals for personal services, and determine if these payments have been properly classified.

New Jersey Unemployment Compensation Law (N.J.S.A. 43:21-11(g) and N.J.A.C. 12:16-2) requires employers to provide records to the auditor for examination. If you refuse to do so, the records can be subpoenaed. The same law declares that all records, reports and other information obtained from employers will be held confidential.

The auditor will discuss the results before leaving your place of business or the location where the audit is conducted. If the audit is not complete at that time or you are not available, the auditor will meet with you, if practicable, or contact you later to discuss the results. An “exit letter” will also be sent to the employer or representative.

If required, the auditor will provide you a summary of any audit adjustments with contribution reports for signature and the payment due.

The auditor’s immediate supervisor will contact you to discuss the audit results. If possible, we will clarify and resolve issues at this time. However, this may not always be possible. Thereafter, you will receive a Chief Auditor’s Notice of Employer Liability with a “Request for Hearing” form.

To appeal the auditor’s determination, you must make a written request for a hearing on the prescribed form within 30 days after the date of the notice, providing your reasons for disputing the determination, and return the request to the Chief Auditor.

Any contributions, interest, and penalty due must be paid. If you are unable to make full payment immediately, you can initiate an installment arrangement with the auditor. Interest will continue to accrue on the unpaid balance of the contributions.

In certain situations, audit results are shared with the federal government, such as the certification of wages for Form 940, Employer’s Annual Federal Unemployment (FUTA) Tax Return, that you file each year. Contact the IRS or your accountant to determine if you are liable for any additional taxes.

Under the New Jersey UC law, individuals receiving payment for personal services are presumed to be your employees unless it is determined that the services are either exempt by law or such services satisfy the three provisions of N.J.S.A. 43:21-19(i)(6), known as the “ABC” test.

The auditor must determine that all three test requirements are satisfied for each individual. These tests are listed here. The auditor will answer your questions about the “ABC” test.

You can contact the auditor directly at the telephone number on the scheduling letter, or ask to speak with the auditor’s supervisor.

Detailed Explanation of the Assessments

Seven different assessments are levied on New Jersey employers according to various statutes. Not all employers will receive all assessments. These assessments, which are required by law, fund programs that are not covered by the quarterly contributions. The assessments are not penalties and are not the result of an error. The same assessment rates apply to all employers. The party responsible for payment of assessments is the employer, not their payroll service.

The (State) Plan 4F Deficit Assessment is levied to cover Unemployment/Disability Benefits paid to unemployed persons who have become disabled and thus have been rendered ineligible for unemployment benefits. This is not the same as regular unemployment or regular disability benefits. It comes from paragraph 4F of the Unemployment Law. Since 1971, funding for this unique program has been accomplished through assessments rather than by increased quarterly contributions. If the total annual benefit payments exceed assessment income, the resulting deficit is divided by the total Taxable Disability Wages of all of the employers. The resulting percentage is multiplied by the Taxable DI Wages reported by each individual company to arrive at the assessment amount for that particular company. In other words, the deficit is pro-rated back to each of the employers.

The Private Plan 4F Deficit Assessment is the same as the State Plan 4F Deficit Assessment but only applies to employers which have been approved to be self-insured for Disability. If an employer has an approved Private Disability Plan with an Insurance Company, the Insurance Company will be billed for this assessment.

The State Plan (Experience Rating) Costs Assessment funds the costs of compiling the data which allows employers in the State Plan Disability program to pay contributions to the fund relative to their experience rating (contributions paid, less benefits charged). This funding is accomplished through assessments rather than through increased quarterly contributions. These assessments began in 1952. The total costs of the experience rating operation are divided by the total taxable wages of all of the State Plan employers and the resulting rate is multiplied by the DI Taxable wages reported by each company for the previous calendar year to arrive at each company’s assessment amount.

The Private Plan Administrative Cost Assessment reimburses the Department of Labor and Workforce Development for costs incurred to oversee and approve Private Disability Plans. This assessment only applies to employers which are self-insured. If an employer has an approved Private Disability Plan with an Insurance Company, the Insurance Company will be billed for this assessment.

Employers with combination (both State & Private) disability plans may receive all of the disability assessments outlined above.

The Catastrophic Illness Fund Assessment (CIF) was created in 1987 by the NJ State Legislature to provide funds to families who have incurred extraordinary medical expenses due to a child’s illness. It is funded, by law, through assessments to all New Jersey employers. There are no exemptions to this assessment. The original rate was $1.00 per employee, per year. As of 2007, the rate is $1.50 per employee, per year, counted according to the individual Social Security numbers reported to the Department on the quarterly wage reports.

The Right to Know Assessment (RTK) started in 1986. This fund supports the costs of collecting information about the hazardous substances used, manufactured, stored and released from businesses in New Jersey. This information is collected, summarized and made available to the public and to emergency responders by the NJ Department of Environmental Protection. Only employers in certain industries are subject to this assessment. The NAICS Industrial Codes of subject employers were determined when the law was written. The assessment rate is $4.00 per employee, per year, but there is a $75.00 minimum assessment per year.

The Pollution Prevention Fund Assessment (PPC) covers the same employers as the Right to Know Fund. This assessment began in 1993. Subject companies must develop and submit to the DEP formal plans to voluntarily reduce their use and generation of hazardous substances that are not products. The assessment funds the administration of this program at DEP. The assessment rate is $2.00 per employee, per year, but there is no minimum assessment.

The Medical Malpractice Liability Insurance Premium Assistance Fund was established by the Legislature in order to keep physicians from leaving the State of New Jersey. The assessment for this fund was based on the number of employees in 2003, 2004, and 2005. All employers were subject to this assessment at a rate of $3.00 per employee. Employers had the option to deduct this surcharge from each employee. NOTE: This assessment is currently inactive.

If you have any further questions about assessments, please fax 609-292-7801 or e-mail: emplacct@dol.nj.gov.

Please note that Payroll Tax Services generally DO NOT pay these assessments for their clients.

Combined Assessment Bill and Rate Computations

Below are the Rate Computations for the seven annual assessments levied on New Jersey Employers by the New Jersey Department of Labor and Workforce Development according to various statutes. Each assessment is described on the page entitled “Detailed Explanation of the Assessments”. The details for computing the assessment rates are shown below. The assessments are based on the wages reported in the calendar year shown on the bill. If there is an assessment to which the employer is not subject, there will be no charge shown on the bill for that particular assessment. The employer, not the payroll company, is responsible for payment of assessment bills and being inactive does not relieve you of this obligation. To pay this bill submit a check with the attached voucher. To pay by E-check or credit card visit The Division of Revenue & Enterprise Services - Online Filing Service, enter your taxpayer ID and PIN and hit “Submit.” Then choose “Pay a Labor Bill,” select 4th quarter and Return Year 2018 and hit “Submit.” Next, for the Type of Labor Bill, use the drop down and select Combined Assessment Bill. You can also pay by setting up or using your Premier Business Services account at https://www16.state.nj.us/NJ_PREMIER_EBIZ/jsp/home.jsp.  Electronic Funds Transfer (EFT) information is available online. Interest will be assessed on late payments. For questions, see related telephone numbers listed below or e-mail the Division of Employer Accounts at: emplacct@dol.nj.gov.  

If mailing in a payment, be sure to use the PO Box number referenced on the bill that you are paying. Not all payments go to the same PO Box.

State Plan 4 F Deficit Assessment/Private Plan 4 F Deficit Assessment: The Unemployment Disability Fund Deficit as of Dec. 31, 2021 was $17,218,164.30. This is divided by the total Disability Taxable Wages for Calendar Year 2021 $117,130,369, resulting in the assessment rate of .000147 applicable to all employers.

State Plan Experience Rating Assessment: The total Experience Rating costs for Fiscal Year ended June 30, 2021 were $3,111,944.92. This is divided by the total State Plan Disability Taxable Wages for Calendar Year 2020 $75,901,095,609.76, resulting in the assessment rate of .000041 applicable to all State Plan employers who paid wages in 2020.

Private Plan Administrative Cost Assessment: The total costs for Private Plan Administration for the Fiscal Year ended June 30, 2021 were $2,133,070.15. This is divided by the total Private Plan Disability Taxable Wages paid during the same Fiscal Year $30,914,060,144.93, resulting in the assessment rate of .000069 applicable to Private Plan employers.

Catastrophic Illness Fund Assessment: The assessment rate is $1.50 for each employee SS# listed on the quarterly reports submitted for the calendar year 2021. Every employee is counted, whether full-time, part-time, or seasonal. Turnover will make the final count larger than any one quarter. Please compare this to the number of W-2's reported on your Federal Form W-3. If there is a (?) in place of the number of employees, we have not received all of the quarterly reports and had to arbitrarily assess your company. If you were arbitrarily assessed, please fax a copy of your Federal W-3 for 2021 and a copy of your Schedule H for household employees, or a copy of your company's tax return showing that there was no wage expense for the year. This information will enable us to correct your bill. All New Jersey employers are subject to this assessment.

Right-To-Know Fund Assessment: The assessment rate is $4.00 for each employee. The minimum assessment is $75.00 per company. Subjectivity depends on the company’s NAICS code.

Pollution Prevention Fund Assessment: The assessment rate is $2.00 for each employee during 2021. There is no minimum assessment. Subjectivity depends on the company’s NAICS code.

Telephone Numbers

NJ Dept. of Labor (Assessments – Billing Questions)

• Phone: 609-633-6400
• Fax: 609-292-7801

NJ Dept. of Labor (Contributions, Interest, Penalties – Billing Questions)     

• Phone: 609-633-6400 

NJ Dept. of Human Services (Catastrophic Illness – Applications for Childrens’ Medical Expenses)         

• Phone: 609-292-0600                                                                                                        

NJ Dept. of Environmental Protection (Right to Know – Surveys)   

• Phone: 609-292-6714

NJ Dept. of Environmental Protection (Pollution Prevention - Plans)   

• Phone: 609-777-0518

Department of Health (Right to Know Labeling – Hazardous Substance)              

• Phone: 609-984-2202

Department of Labor (SIC or NAICS Code Control – Industry Code Questions)        

• Phone: 609-292-2633

There are several yearly assessments for which employers who are subject to the Temporary Disability Benefits Law are liable:

• An assessment to offset a year-ending deficit in excess of $200,000.00 in the Unemployment Disability Account. All employers covered by the law or their indemnified insurers are liable for this assessment.
• An assessment to cover the Department’s administrative cost of maintaining separate disability benefit accounts for employers required to contribute to the State Disability Benefits Fund. Employers covered under the State Plan are liable for this assessment.
• An assessment to cover the Department’s administrative cost of supervising and operating approved private plans. Employers with approved private plans or their indemnified insurers are liable for this assessment.
• An assessment to cover the Catastrophic Illness, Right to Know and Pollution Prevention Control. These assessments are billed together annually. All New Jersey employers are billed $1.50 per employee for the Catastrophic Illness Fund. Only specific employers (based upon their SIC codes) are billed $4.00 per employee for the Right to Know Fund (minimum bill is $75), and $2.00 per employee for the Pollution Prevention Control Fund.