Chapter 1 Employer Taxes and Wage Reporting
Section 8 - Assessments
Temporary Disability Insurance Assessments
DETAILED EXPLANATION OF THE ASSESSMENTS
Seven different assessments are levied on New Jersey employers according to various statutes. Not all employers will receive all assessments. These assessments, which are required by law, fund programs that are not covered by the quarterly contributions. The assessments are not penalties and are not the result of an error. The same assessment rates apply to all employers. The party responsible for payment of assessments is the employer, not their payroll service.
The (State) Plan 4F Deficit Assessment is levied to cover Unemployment/Disability Benefits paid to unemployed persons who have become disabled and thus have been rendered ineligible for unemployment benefits. This is not the same as regular unemployment or regular disability benefits. It comes from paragraph 4F of the Unemployment Law. Since 1971, funding for this unique program has been accomplished through assessments rather than by increased quarterly contributions. If the total annual benefit payments exceed assessment income, the resulting deficit is divided by the total Taxable Disability Wages of all of the employers. The resulting percentage is multiplied by the Taxable DI Wages reported by each individual company to arrive at the assessment amount for that particular company. In other words, the deficit is pro-rated back to each of the employers.
The Private Plan 4F Deficit Assessment is the same as the State Plan 4F Deficit Assessment but only applies to employers which have been approved to be self-insured for Disability. If an employer has an approved Private Disability Plan with an Insurance Company, the Insurance Company will be billed for this assessment.
The State Plan (Experience Rating) Costs Assessment funds the costs of compiling the data which allows employers in the State Plan Disability program to pay contributions to the fund relative to their experience rating (contributions paid, less benefits charged). This funding is accomplished through assessments rather than through increased quarterly contributions. These assessments began in 1952. The total costs of the experience rating operation are divided by the total taxable wages of all of the State Plan employers and the resulting rate is multiplied by the DI Taxable wages reported by each company for the previous calendar year to arrive at each company’s assessment amount.
The Private Plan Administrative Cost Assessment reimburses the Department of Labor and Workforce Development for costs incurred to oversee and approve Private Disability Plans. This assessment only applies to employers which are self-insured. If an employer has an approved Private Disability Plan with an Insurance Company, the Insurance Company will be billed for this assessment.
Employers with combination (both State & Private) disability plans may receive all of the disability assessments outlined above.
The Catastrophic Illness Fund Assessment (CIF) was created in 1987 by the NJ State Legislature to provide funds to families who have incurred extraordinary medical expenses due to a child’s illness. It is funded, by law, through assessments to all New Jersey employers. There are no exemptions to this assessment. The original rate was $1.00 per employee, per year. As of 2007, the rate is $1.50 per employee, per year, counted according to the individual Social Security numbers reported to the Department on the quarterly wage reports.
The Right to Know Assessment (RTK) started in 1986. This fund supports the costs of collecting information about the hazardous substances used, manufactured, stored and released from businesses in New Jersey. This information is collected, summarized and made available to the public and to emergency responders by the NJ Department of Environmental Protection. Only employers in certain industries are subject to this assessment. The NAICS Industrial Codes of subject employers were determined when the law was written. The assessment rate is $4.00 per employee, per year, but there is a $75.00 minimum assessment per year.
The Pollution Prevention Fund Assessment (PPC) covers the same employers as the Right to Know Fund. This assessment began in 1993. Subject companies must develop and submit to the DEP formal plans to voluntarily reduce their use and generation of hazardous substances that are not products. The assessment funds the administration of this program at DEP. The assessment rate is $2.00 per employee, per year, but there is no minimum assessment.
The Medical Malpractice Liability Insurance Premium Assistance Fund was established by the Legislature in order to keep physicians from leaving the State of New Jersey. The assessment for this fund was based on the number of employees in 2003, 2004, and 2005. All employers were subject to this assessment at a rate of $3.00 per employee. Employers had the option to deduct this surcharge from each employee. NOTE: This assessment is currently inactive.
If you have any further questions about assessments, please fax 609-292-7801 or e-mail: firstname.lastname@example.org.
Please note that Payroll Tax Services generally DO NOT pay these assessments for their clients.
COMBINED ASSESSMENT BILL AND RATE COMPUTATIONS
Below are the Rate Computations for the seven annual assessments levied on New Jersey Employers by the New Jersey Department of Labor and Workforce Development according to various statutes. Each assessment is described on the page entitled “Detailed Explanation of the Assessments”. The details for computing the assessment rates are shown below. The assessments are based on the wages reported in the calendar year shown on the bill. If there is an assessment to which the employer is not subject, there will be no charge shown on the bill for that particular assessment. The EMPLOYER, not the payroll company, is responsible for payment of assessment bills and being inactive does not relieve you of this obligation. To make payment of a bill, submit a check with the voucher attached to the bill or visit The Division of Revenue & Enterprise Services - Online Filing Service, enter your taxpayer ID and PIN and hit “Submit”. Then choose “Pay a Labor Bill” to pay by E-check or credit card. Electronic Funds Transfer (EFT) information is available online. Interest will be assessed on late payments. For questions, see related telephone numbers listed below or e-mail the Division of Employer Accounts at: email@example.com.
If mailing in a payment, be sure to use the PO Box number referenced on the bill that you are paying. Not all payments go to the same PO Box.
State Plan 4 F Deficit Assessment/Private Plan 4 F Deficit Assessment: The Unemployment Disability Fund Deficit as of Dec.31, 2015 was $20,394,640. This is divided by the total Disability Taxable Wages for Calendar Year 2015 $94,858,790,698 resulting in an assessment rate of .000215 applicable to all employers.
State Plan Experience Rating Assessment: The total Experience Rating costs for the Fiscal Year ended June 30, 2015 were $4,206,760. This is divided by the total State Plan Disability Taxable Wages for Calendar Year 2014 $68,963,285,410, resulting in the assessment rate of .000061 applicable to all State Plan employers who paid wages in 2014.
Private Plan Administrative Cost Assessment: The total costs for Private Plan Administration for the Fiscal Year ended June 30, 2015 were $1,949,670. This is divided by the total Private Plan Disability Taxable Wages paid during the same Fiscal Year $23,210,357,143, resulting in the assessment rate of .000084 applicable to Private Plan employers.
Catastrophic Illness Fund Assessment: The assessment rate is $1.50 for each employee SS# listed on the quarterly reports submitted for the calendar year 2015. Every employee is counted, whether full-time, part-time, or seasonal. Turnover will make the final count larger than any one quarter. Please compare this to the number of W-2s reported on your Federal Form W-3. If there is a (?) in place of the number of employees, we have not received all of the quarterly reports and had to arbitrarily assess your company. If you were arbitrarily assessed, please fax a copy of your Federal W-3 for 2015 and a copy of your Schedule H for household employees, or a copy of your company’s tax return showing that there was no wage expense for the year. This information will enable us to correct your bill. All New Jersey employers are subject to this assessment.
Right-To-Know Fund Assessment: The assessment rate is $4.00 for each employee. The minimum assessment is $75.00 per company. Subjectivity depends on the company’s NAICS code.
Pollution Prevention Fund Assessment: The assessment rate is $2.00 for each employee during 2015. There is no minimum assessment. Subjectivity depends on the company’s NAICS code.
NJ Dept. of Labor (Assessments) 609-633-6400 Billing Questions (Assessments)
NJ Dept. of Labor (Assessments) 609-292-7801 (fax) Billing Questions (Assessments)
NJ Dept. of Labor (Contributions, Interest, Penalties) 609-633-6400 Billing Questions (Contributions)
NJ Dept. of Human Services (Catastrophic Illness) 609-292-0600 Applications for Childrens’ Medical
NJ Dept. of Environmental Protection (Right to Know) 609-292-6714 Right to Know Surveys
NJ Dept. of Environmental Protection (Pollution Prev.) 609-777-0518 Pollution Prevention Plans
Department of Health (Right to Know Labeling) 609-984-2202 Hazardous Substance Labeling
Department of Labor (SIC or NAICS Code Control) 609-292-2633 Industry Code Questions
There are several yearly assessments for which employers who are subject to the Temporary Disability Benefits Law are liable:
1. An assessment to offset a year-ending deficit in excess of $200,000.00 in the Unemployment Disability Account. All employers covered by the law or their indemnified insurers are liable for this assessment.
2. An assessment to cover the Department’s administrative cost of maintaining separate disability benefit accounts for employers required to contribute to the State Disability Benefits Fund. Employers covered under the State Plan are liable for this assessment.
3. An assessment to cover the Department’s administrative cost of supervising and operating approved private plans. Employers with approved private plans or their indemnified insurers are liable for this assessment.
4. An assessment to cover the Catastrophic Illness, Right to Know and Pollution Prevention Control. These assessments are billed together annually. All New Jersey employers are billed $1.00 per employee for the Catastrophic Illness Fund. Only specific employers (based upon their SIC codes) are billed $2.00 per employee for the Right to Know Fund (minimum bill is $50), and $2.00 per employee for the Pollution Prevention Control Fund.