Every year at the beginning of July every employer subject to NJ unemployment taxes receives a “Combined Assessment Bill”. The form is salmon colored and is mailed from the New Jersey Department of Labor and Workforce Development (NJ LWD) Division of Employer Accounts.
Because NJ LWD is also responsible for administering New Jersey’s unemployment and disability benefits programs as well as collecting related payroll taxes, clients are typically confused and often contact their accountant or payroll service for direction. Here is what you need to know.
Who Pays the Bill?
The employer is responsible for paying the bill. The assessments listed on the bill are not related to payroll taxes and are not paid by your payroll service. The assessments are not penalties, nor are they the result of any error.
The bill should be paid right away as interest is assessed if payment is late. The amount due can be just a few dollars if the employer has only 1-2 employees, growing to several hundred dollars for businesses with 20-50 employees. Payment can be made by check or online following the instructions on the form. The due date is usually on, or around August 1st.
Detailed Description of Each Assessment
For the curious, here is a detailed description of each assessment from the New Jersey Department of Labor and Workforce Development website.
State Plan 4F Deficit Assessment
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.
Private Plan 4F Deficit Assessment
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.
State Plan Experience Rating Costs 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).
Private Plan Administrative Cost Assessment
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.
Combination of State and Private
Employers with combination (both State & Private) disability plans may receive all of the disability assessments outlined above.
Catastrophic Illness Fund Assessment
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.
Right to Know Assessment
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.
Pollution Prevention Fund Assessment
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.
Medical Malpractice Liability Insurance Premium Assistance Fund
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. This assessment is currently inactive.
Questions regarding the combined assessment can be directed to the NJ Assessment Office at 609-292-7397 or email assessments@dol.state.nj.us
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