Under current New Jersey law, most individuals who are unemployed due to a stoppage of work are disqualified from unemployment benefits. While the New Jersey Supreme Court held that strikers are entitled to unemployment benefits as long as the stoppage of work does not result in a 20 percent or greater reduction in the employer’s output of goods or services, that framework still left many strikers ineligible for benefits.

Senate Bill S2160, which was introduced on May 5, 2016, and cleared the New Jersey Senate on August 1, 2016, would significantly change that. The bill permits the payment of unemployment insurance (UI) benefits during labor disputes under certain specified conditions. Specifically, for any claim for a period of unemployment commencing on or after April 10, 2016, a claimant is not disqualified from receiving UI benefits where the claimant’s unemployment is due to a labor dispute caused by the failure or refusal of the employer to comply with an agreement or contract between the employer and the claimant, including a collective bargaining agreement with a union representing the claimant, or a state or federal law pertaining to hours, wages, or other conditions of work. (The significance of April 10, 2016, is that the date is three days before a strike occurred at Verizon Communications Inc.; the intent of the bill clearly is to allow those strikers to obtain unemployment benefits).

Under the bill, unemployment benefits would be immediately available where the claimant’s unemployment is caused by a lockout or a labor dispute that was caused by the employer’s noncompliance with an agreement or contract between the employer and the claimant. Where the claimant’s unemployment is not caused by a lockout or a labor dispute caused by the employer’s noncompliance with an agreement or contract between the employer and the claimant, benefits would be denied for the first 30 days of unemployment. However, the waiting period would not apply if the employer should hire a permanent replacement worker for the claimant’s position, and under those circumstances, the New Jersey Department of Labor and Workforce Development may impose a penalty upon the employer of up to $750 per employee per week of benefits lost, to be paid into the unemployment compensation auxiliary fund. Assembly Bill A3819, virtually identical to S2160, was introduced on May 23, 2016. On September 12, 2016, the Assembly Labor Committee advanced A3819 for consideration by the full Assembly.