New Jersey employers have been dealing with many distinct crises during the COVID-19 pandemic, including government-mandated shutdowns, a labor shortage as the economy reopens, the ongoing need for financial resources and, now, uncertainty as the Delta variant and perhaps other variants loom.
In the midst of dealing with these issues, New Jersey employers were hit with another issue recently — a tax increase designed to replenish the Unemployment Insurance Trust Fund.
This adds yet another hurdle for employers. The frustrating thing is that this tax increase did not have to happen. There is a better way to go.
The state could eliminate or at least sizably reduce the tax increase by taking some of the billions of dollars it received in federal aid from the American Rescue Plan and allocate it to the state’s unemployment fund. This is exactly the kind of relief the emergency federal funds were intended to address.
In fact, governors and lawmakers in at least 29 states have either already tapped or have considered tapping federal relief funds to restock their state unemployment accounts, according to a May analysis by the Associated Press.
The New Jersey Chamber of Commerce has urged and will continue to urge Gov. Phil Murphy and the Legislature to consider this step.
Those in the New Jersey business community can use a break as they struggle to outlast the pandemic.
This year, New Jersey employers are facing a $252 million increase in the amount they contribute to the unemployment fund. It is the first of a three-year tax hike that could, in total, cost employers in excess of $1 billion — if the state doesn’t assist.
To be fair, Murphy and the Legislature did spread out the tax hike over three years to lessen the blow on employers, something the New Jersey Chamber of Commerce and other business organizations asked for. However, that happened prior to the announcement of the additional stimulus money.
Now that the state has received federal American Rescue Plan funds, the state could, and should, do more to help businesses recover.
The Murphy administration has said it wants to do all it can to help workers who lost jobs during the pandemic. The single most effective step the administration can take to fulfill this goal is to help businesses get back on their feet so they can continue to hire.
Businesses need more resources, rather than more hurdles, during this unprecedented time.
The money is available to provide these resources. We need our government leaders to authorize the payments.