Originally posted on: https://www.employmentlit.com/2023/07/13/full-time-and-part-time-calculation-of-unemployment-benefits/
By: Nisha S. Talati, Esq. and Ty Hyderally, Esq.
Recently, the New Jersey Appellate Division held that a claimant who is separated from full-time employment, may include wages received from a part-time position, which they continue to maintain, in the calculation of their average weekly wage for purposes of unemployment benefits. See Karen McKnight v. Board of Review, Department of Labor, Toys “R” Us – Delaware, Inc., and Wegmans Food Markets, Inc., 2023 N.J. Super. LEXIS 70.
The appellant, Ms. McKnight, was employed full-time at Toys “R” Us (“Toys”) and part-time at Wegmans Food Market (“Wegmans”). In June 2018, Toys permanently closed, and Ms. McKnight was laid off after twenty-one years of employment. Shortly thereafter, Ms. McKnight applied for unemployment benefits, while continuing to work part-time at Wegmans. In July 2018, Ms. McKnight received an initial determination from the New Jersey Department of Labor, Division of Unemployment Insurance (“Division”) which established her weekly benefit rate, a partial weekly benefit rate, and a maximum benefit amount. These amounts included both of her full-time and part-time wages. Ms. McKnight collected unemployment from June 2018 through May 2019.
In May 2019, Ms. McKnight received a monetary redetermination from the Division which excluded her income from Wegmans in the calculation of her unemployment benefits. This redetermination reduced Ms. McKnight’s weekly benefit rate, her partial benefit rate, and her maximum benefit amount. Due to this, the Division also requested a refund in the amount of $6,099. Ms. McKnight brought this case in front of the Appeal Tribunal and Board of Review multiple times. After three hearings, they refused to consider the wages earned from the part-time employment at Wegmans. Ultimately, the Board of Review determined that Ms. McKnight was never unemployed and not eligible for benefits in the first place. The Board of Review also issued that Ms. McKnight was liable to return her overpayment in the final amount of $6,277. Ms. McKnight appealed the decision to the Appellate Division for further determination.
The Appellate Division reviewed the language of the New Jersey Unemployment Compensation Law (“UCL”) in order to determine if Ms. McKnight was eligible for unemployment benefits and if so, the calculation of such benefits. Using the analysis of N.J.S.A. 43:21-4, the court found that Ms. McKnight had adequate base weeks of employment during her base year with Toys to qualify for unemployment. The court then looked to the UCL to determine the calculation for the weekly benefit rate and partial benefit rate.
Ultimately, the court held that the Division’s initial benefit determination was correct and that the Board of Review’s decision to affirm the Division’s monetary redetermination of unemployment benefits was in violation of the UCL. Using the Division’s redetermination calculation method, Ms. McKnight’s Wegman’s earnings were deducted from her weekly benefit rate, those earnings were then deducted from her partial benefit rate, which would leave her with no benefits at all for the weeks she earned more than the partial benefit rate based only on her Toys earnings. The court recognized that this method used by the Division would charge Toys with nothing even though they caused Ms. McKnight’s unemployment.
The court further held that redetermination by the Division “essentially punishes claimants who maintain part-time employment after being laid off by a full-time employer.” McKnight at 17. The court also held that the Division’s interpretation of the UCL hinders the purpose of the UCL which “is to encourage persons to work[.]” citing Wojcik v. Bd. of Rev., 58 N.J. 341, 346 (1971). As the court stated, using the analysis of the Division, Ms. McKnight was punished for maintaining her part-time job following the loss of her full-time job of twenty-one years.
In conclusion, the Appellate Court found that the initial calculation determined by the Division was correct and proper and that part-time work wages may be included in the calculation for unemployment benefits. The exclusion of part-time wages violates the objective of the unemployment benefits statute. This decision is a win for New Jersey employees who are unemployed from their full-time position, but continue to work part-time.
