A Senate committee has endorsed spending $50 million in federal funds to upgrade New Jersey’s unemployment benefits computer system, as well as an audit to analyze why so many people still aren’t receiving benefits, five months into the pandemic-fueled recession.

More than 1.4 million New Jerseyans filed initial claims for unemployment benefits in the 20 weeks since the economic shutdowns associated with the coronavirus pandemic began in March. The state says 96% of those who are eligible have gotten benefits – which means tens of thousands still haven’t.

The audit bill, S2512, unanimously endorsed by the Senate Labor Committee would require the State Auditor to complete a performance review audit within six months. It would look at the Division of Unemployment and Temporary Disability Insurance's use of funding, staffing and operations. The report would be due within a year.

“The Department of Labor has failed so many of the communities throughout the state of New Jersey. There needs to be more transparency and a review of the department,” said Sen. Mike Testa, R-Cumberland.

Testa said some constituents have finally started receiving benefits but that “far too many” are still waiting without an explanation of what is happening.

“This is absolutely unacceptable. This is not how government is supposed to work,” Test said. “These people paid into unemployment for an endless time, and they’ve been waiting in limbo, waiting for their benefits that they paid for, that they’re owed, that they are due. And it’s truly unacceptable. The Department of Labor has failed miserably.”

The $50 million in CARES Act funding that would be allocated to improve the processing of unemployment claims, under bill S2488, appears to be in line with the Murphy administration’s plan to allocate $90 million from the federal aid to technology improvements for various benefit programs.

The committee also endorsed S2504, which would exclude unemployment benefits paid during the coronavirus pandemic state of emergency from calculation of employer unemployment contributions.

An employer’s unemployment insurance taxes are in part tied to their laid-off or furloughed workers’ use of the benefits.

“While we are concerned about the longer-term cost of unemployment insurance for our employers of the state, this bill at least provides a short-term relief,” said Raymond Cantor, vice president of government affairs for the New Jersey Business and Industry Association.

“Right now as you understand with this pandemic and the economic downturn, short-term relief is important for our businesses to be able to stay in business and hopefully move forward when the situation changes,” Cantor said.

The bill also provides some help for nonprofits who choose to be self-insured and reimburse the state directly for unemployment claims. The CARES Act provides funding for half of those costs, and the bill would waive the other half. The first quarterly payments on those bills are due this month.

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