Opinion
DOCKET NO. A-5793-12T2
04-06-2015
CHARLES T. WARREN, Appellant, v. BOARD OF REVIEW and TRANS WEBB LLC, Respondents.
Sarah Hymowitz, Assistant Supervising Attorney, argued the cause for appellant (Legal Services of New Jersey, Inc., attorneys; Ms. Hymowitz and Melville D. Miller, Jr., General Counsel, on the briefs). Christopher M. Kurek, Deputy Attorney General, argued the cause for respondent Board of Review (John J. Hoffman, Acting Attorney General, attorney; Lewis A. Scheindlin, Assistant Attorney General, of counsel; Mr. Kurek, on the brief). Respondent Trans Webb, LLC has not filed a brief.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION Before Judges Sabatino and Simonelli. On appeal from the Board of Review, Department of Labor and Workforce Development, Docket No. 420-568. Sarah Hymowitz, Assistant Supervising Attorney, argued the cause for appellant (Legal Services of New Jersey, Inc., attorneys; Ms. Hymowitz and Melville D. Miller, Jr., General Counsel, on the briefs). Christopher M. Kurek, Deputy Attorney General, argued the cause for respondent Board of Review (John J. Hoffman, Acting Attorney General, attorney; Lewis A. Scheindlin, Assistant Attorney General, of counsel; Mr. Kurek, on the brief). Respondent Trans Webb, LLC has not filed a brief. PER CURIAM
Appellant Charles T. Warren appeals from the June 18, 2013 final decision of the Board of Review (Board), which affirmed the decision of the Appeal Tribunal rejecting his request pursuant to N.J.A.C. 12:17-5.6 to use the alternative base year in calculating his unemployment benefits. The Appeal Tribunal found that Warren's request was untimely and he failed to show good cause for filing a late claim. We reverse and remand for further proceedings.
I.
We begin with a review of the statutes and regulations pertinent to this appeal. To be eligible for unemployment, the claimant must have worked a minimum of twenty base weeks or earned at least 1000 times the minimum wage during the base year. N.J.S.A. 43:21-4(e)(5)(B). "Base year" is defined as "the first four of the last five completed calendar quarters immediately preceding an individual's benefit year." N.J.S.A. 43:21-19(c)(1).
N.J.A.C. 12:17-5.6 permits the use of an alternative base year in calculating unemployment benefits for individuals claiming benefits after a period of disability. The regulation provides as follows, in pertinent part:
An individual, who files a claim for benefits immediately after a period of
disability compensable under the provisions of the Temporary Disability Benefits Law, N.J.S.A. 43:21-25 [to -65] or compensable under the Workers' Compensation Law, N.J.S.A. 34:1-1 [to :21-7] may have the option of using an alternative base year consisting of the first four of the most recent five completed calendar quarters preceding the date his or her disability began, to establish eligibility for, or increase entitlement for, unemployment benefits. If the previous position is available, but the individual is no longer able to perform the duties of the position, the alternative base year provisions of this section shall not apply. If the individual does not qualify for benefits pursuant to N.J.A.C. 12:17-5.1 during this base year, he or she may use wages paid during the alternate base years prescribed in N.J.A.C. 12:17-5.2, but defined as preceding the date of disability."Good cause" is defined as "any situation which was substantial and prevented the claimant from reporting as required by the Division." N.J.A.C. 12:17-4.1.
This section applies only to those individuals whose employment is not available at the conclusion of the disability period, provided the individual files his or her claim within four weeks of recovery, except where he or she has shown good cause as defined at N.J.A.C. 12:17-4.1 for filing a claim after four weeks.
[N. J.A.C. 12:17-5.6(a)(1).]
Pursuant to N.J.A.C. 12:17-8.7, a claimant receiving "severance or separation pay" is eligible for unemployment benefits. The regulation provides as follows, in pertinent part:
The receipt of severance or separation pay in periodic payments or in a lump sum shall not be a bar to eligibility for unemployment benefits. However, the payments do not extend the individual's employment period and such weeks and payments may not be used to establish or increase his or her monetary eligibility for benefits for any claim filed after the period for which they are made."Severance or separation pay" is defined as "any lump sum payment or periodic payment made to an individual by an employer at termination under contract or obligation or by custom which is based on past services performed for the employer." N.J.A.C. 12:17-8.7(a).
[N. J.A.C. 12:17-8.7(b).]
In contrast, pursuant to N.J.A.C. 12:17-8.8, a claimant receiving "salary continuation" is ineligible for unemployment benefits. The regulation provides as follows, in pertinent part:
An employer may elect to continue wage or salary payments and forego the services normally performed by the employee through the date of termination provided for by contract or other agreement. A claim filed by an individual receiving such payments shall be invalid and he or she shall be ineligible for benefits through the date of termination of contract or other agreement. However, salary continuation payments may be used to establish a claim for benefits after
the period for which the individual has received such payments.
[N. J.A.C. 12:17-8.8(a).]
II.
The record reveals that from September 1997 to March 27, 2012, Warren was employed by respondent Trans Webb, L.L.C. (Trans Webb) as a machine operator. In June 2009, Warren suffered a work-related injury that rendered him unable to perform his job duties. He was placed on a medical leave of absence and pursued a workers' compensation claim. He eventually returned to work on light duty and later resumed his regular work duties. He left work again after his back condition worsened and received disability benefits from June 22, 2011 to December 31, 2011.
Warren recovered from his disability and sought to return to work in February 2012. He did not return, however, because Trans Webb advised him that he would be part of a massive layoff and would receive a severance package. On April 11, 2012, Warren executed an agreement, which provided as follows, in pertinent part:
Your last day of employment will be March 27, 2012. Thereafter, you will be paid certain severance benefits listed in Section 4. You will remain on the Company's payroll, but only for the purposes set forth in this Agreement, and in order to facilitate these payments.
. . . .
The Company will pay you severance payments in the total gross amount of $11,640.00 ("Severance Amount"). The Severance Amount represents your normal gross pay for 15 weeks. The Severance Amount will be paid to you according to the Company's normal payroll schedule, in the manner by which you were normally paid. . . . Severance payments will be subject to normal payroll tax withholding and other legally required/mandatory deductions[.]
Pursuant to the agreement, Warren received payments for fifteen weeks, from April 8 to July 21, 2012. After the payments ceased, he filed a claim for unemployment benefits on August 5, 2012, and requested using the alternative base year to calculate his benefits.
The Deputy Director of the Division of Unemployment and Disability Insurance (Deputy) declined Warren's request, finding that Warren did not file his claim within four weeks of recovery from his disability, as required by N.J.A.C. 12:17-5.6(a)(1). Instead, using the ordinary base year, the Deputy calculated Warren's benefits based on the fifteen weeks of severance payments he received from Tran Webb rather than on wages he earned prior to his disability. This resulted in Warren only receiving thirteen weeks of unemployment benefits. Had the Deputy used the alternative base year, Warren would have been eligible for up to approximately sixty weeks of benefits, which included any federal or state extensions.
Warren appealed to the Appeal Tribunal. He argued that he did not file a claim for unemployment benefits before August 5, 2012 based on his attorney's advice that he was ineligible for unemployment benefits while receiving payments from his employer.
The Appeal Tribunal determined that Warren did not file his claim within four weeks of recovery from his disability and his reliance on his workers' compensation attorney's advice did not constitute unusual or compelling circumstances to extend that period, as required by N.J.A.C. 12:17-5.6(a)(1). Accordingly, the Appeal Tribunal concluded that Warren's request to use the alternative base year to calculate his benefits was untimely.
Warren appealed to the Board, arguing that according to the "continuation pay" instruction in the "unemployment rulebook," which mirrors N.J.A.C. 12:17-8.8, he was ineligible for unemployment benefits until after the payments from his employer ceased:
N.J. Dep't of Labor & Workforce Dev., Unemployment Insurance: Your Rights and Responsibilities 19, available at http://lwd.dol.state.nj.us/labor/forms pdfs/ui/PR-94.pdf.
If by contract or other agreement, your employer continues to pay your wages and foregoes the services normally performed by
you through your date of termination, this is considered to be "Continuation Pay." These payments may be either paid in the customary pay period cycles, or in a lump sum. You are considered to be "employed" during this and you are not entitled to unemployment benefits. Your claim for benefits is considered invalid because you are not considered to be "unemployed." A new claim may be filed after the effective date of separation from the employment.He also argued the payments were not "severance pay" because they were not based on past service or made in a lump sum.
[Unemployment Insurance: Your Rights and Responsibilities, supra, at 19.]
The "unemployment rulebook" contains the following instruction for "severance pay," which mirrors N.J.A.C. 12:17-8.7, although the rulebook does not use the alternative term "separation pay" that appears in the regulation:
If your former employer gives you a lump sum or periodic payment at the time of separation which is based on past services, such payment is considered to be "Severance Pay." Severance pay does not lengthen the period of employment and is not a bar to the payment of unemployment insurance benefits. However, severance pay may not be used to establish or increase monetary entitlement for any future unemployment claim.
[Ibid.]
The Board affirmed on the record made by the Appeal Tribunal, without considering the potential confusion that reasonably could arise from the related concepts of "severance pay" and "continuation pay" appearing in N.J.A.C. 12:17-8.7 and N.J.A.C. 12:17-8.8. The Board also did not adequately consider whether, in light of the capacity of these regulations to engender confusion, Warren had shown good cause for his delay in filing for benefits until after his payments from his employer ended, and whether he therefore deserved an extension of time pursuant to N.J.A.C. 12:17-5.6. Accordingly, we reverse the Board's decision and remand to the Board for further proceedings.
Reversed and remanded for further proceedings consistent with this opinion. We do not retain jurisdiction. I hereby certify that the foregoing is a true copy of the original on file in my office.
CLERK OF THE APPELLATE DIVISION