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Senate Committee Takes Step to Unblock Logjam of Unemployment Appeals

Joe Tyrrell | October 2, 2012

Those denied benefits would be paid if review took more than eight weeks.

A state Senate committee has wielded a sharp stick to prod the Department of Labor to do more to reduce a lengthy backlog of unemployment appeals, releasing a bill that would require it to begin paying benefits in cases that remain unresolved after eight weeks.

Beating that deadline would be a challenge, even under an improved process outlined by department officials at a hearing Monday before the Labor committee. They touted tougher rules to penalize claimants who are found to have lost jobs because of misconduct.

The committee voted along party lines, with the two Republicans abstaining, to advance the legislation, S2212, from state Sens. Ray Lesniak (D-Union) and Fred Madden (D-Gloucester).

The sponsors said they acted because of a growing lag during the past two years in the time the department takes to decide appeals of denial of unemployment benefits. The Labor Department now takes 20 to 24 months to even hear an appeal, twice as long as in early 2011, and a decision can take as long as six months.

But department officials said they already have taken steps to reduce delays, at least at the upper level of the appeals process. The increased backlog followed a similar increase in the number of claims and appeals, swelled by the recession.

With New Jersey’s unemployment rate rising, the state continues to get about 10,000 new benefits claims a week. About 3,000 decisions a month result in appeals, according to department figures.

While some staff is being added, simply hiring more people to process the appeals will not necessarily eliminate the backlog quickly, because they require training, according to department officials.

That explanation did not carry much weight in the hearing room. Employment lawyer Alan Schorr said the state commonly explains delays by saying it’s “swamped” by the caseload.

“People who are suffering need answers, and they need them right away,” said state Sen. Richard Codey (D-Essex). Frederick Zavaglia, the department chief of staff, acknowledged that its board of appeals takes longer than the legislation envisions to process appeals. But in a month, the department’s higher-level review will be able to handle cases that make it that far within 45 days, he told the committee.

In the majority of cases, the result ultimately affirms the original decision that appellants were not entitled to benefits, according to department officials. Recently enacted rules denying benefits to people fired for misconduct have saved the state $133 million, Zaviglia told the committee.

Meanwhile, the number of challenges filed by employers arguing that ex-employees do not deserve benefits also has risen, according to department statistics. Those cases now account for roughly 15 percent of appeals. With unemployment extended during the recession, New Jersey exhausted its own accounts and has been borrowing money from the federal government to cover the shortfall. But the department has reversed the trend, and now projects it will be back in the black in two years.

Some business and industry groups oppose the new legislation, arguing that it could increase costs to taxpayers. The key provisions would require the Labor Department to begin paying benefits if an appeal drags on for more than 60 days, and to keep paying them until a decision is issued. Even if benefits are ultimately denied, under the bill, the department “shall not be permitted to require the claimant to repay any of the benefits.”

That provision raised red flags for committee Republicans. While concerned about reducing bureaucratic delays, Sen. Dawn Marie Addiego (R-Burlington) joined Sen. Anthony Bucco (R-Morris) in questioning that aspect of the legislation. “If you’re not entitled to it, you shouldn’t be allowed to keep taxpayers’ money,” Addiego said.

Madden, the committee chair, agreed to draw a distinction between claims that result from fraud, which would require repayment, as opposed to people who make a good faith effort to go through the department’s process but then are found to not qualify for benefits.

During three decades reporting in New Jersey, Joe Tyrrell has covered everything from Avon to Zarephath, with a particular emphasis on politics and government, the environment and agriculture. He founded the New Jersey Foundation for Open Government, which unites civic groups, citizens and journalists to promote transparency and ethics.

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