How is Income Calculated for Unemployment Benefits if You Receive Bonuses

My question involves labor and employment law for the state of: New Jersey

Here is my issue. I was let go from the job I had for the last 3 years on January 26th. The company I worked for was acquired by another company last December. A lot of my responsibilities changed and I had trouble learning the new tasks. I filed and my HR director said she would just say it was "At Will" when called so I wouldn't have a problem getting benefits and that I should say the same thing. I filed on the 28th and I had my claims examiner interview today. She looked at my earnings for my base year period (Q4 2016 through Q3 2017). My total gross wages were about $74,000 the entire year. That should make me eligible for the maximum weekly benefit of $681. In Q4 2106 I was paid $35,000 (base salary of $52,000, a holiday bonus of $5,100, and when my company was acquired, I was paid a transactional bonus of $17,000.) The other 3 quarters I earned $13,000 each. The claims examiner asked about my earnings fro the 4th quarter of 2016, since the amount stuck out like a sore thumb, and I told her that was because of the $17,000 transactional bonus. She then said that bonuses do not count towards the base year earnings and she would forward my claim to monetary to determine if that will affect my weekly benefit amount. She asked about my last day and why I was separated and then said she would contact my employer. I checked my online claim and it says it has been "pended" and now I am scheduled for a monetary interview on March 15th. The reason is probably the bonus. I googles a NJ statute. Here is the statute:

"Remuneration" means all compensation for personal services, including commission and bonuses and the cash value of all compensation in any medium other than cash, including payments "in kind" as defined at N.J.A.C. 12:16-4.8.

"Wages" means remuneration paid by employers for employment including "in kind" payments as provided in N.J.A.C. 12:16-4.8. If a worker receives gratuities regularly in the course of employment from other than the employer, his or her "wages" shall also include the gratuities received, if reported in writing to the employer in accordance with regulations of the Division at N.J.A.C. 12:16-4.9.

It seems according to that statute that those bonuses should count towards my claim. It is possible the claims examiner isn't familiar with monetary issues since she only handles nonmonetary issues. Even if you take away the $17,000 bonus, my gross wages for the year are $57,000, which means my weekly benefit rate is about $657. Only $24 less. I wonder if I should tell unemployment I will waive the monetary interview and take the lesser amount of $657. Any advice here?

what do you mean by "transactional bonus"? What was the exact purpose of the bonus? That might be the confusion -- I can't say I've heard of bonuses called "transactional" and I've been in benefits and compensation for a long time. But I do agree must bonuses would normally be included in wages. But NJ is not my state, so I can't tell you for absolute certain.

The bonus was from the sale of the company. Every employee got something based on salary and length of time with the company. Basically for everybody's efforts. That was a 1 time thing. The $5,100 holiday bonus was pretty regular every year.

What I mean is if I take away that $17,000 bonus, my gross wages for my base year period are $57,000, which will make my WBR about $657. Maybe it would be best to tell the state I will waive the monetary interview and they can just take off the $17K and then I won't have to wait a month to receive a cent from unemployment.

You should be filing for each week from the time when you filed the original claim. This claim set up for xxxxx amount of money for xx weeks. there was a claim to set up monetarily. Then they began the process of determining eligibility based on other issues. You are not monetarily ineligible, you do have a claim, but you are actually waiting to find out if you are otherwise eligible.

There is also another issue, that you believe you should be qualified for more money than your original monetary determination, based on this so called "transactional bonus." It isn't that you get no unemployment if you don't do the monetary hearing, and it makes very little difference as to when your claim will be adjudicated and you might start receiving it whether you file this appeal or not.

You'd start getting benefits after the initial determination if approved. It would just be for a different amount that you think you should qualify for, but either way, if approved on your separation issue, you would qualify to receive a weekly benefit, starting after the second week you actually certify for. If it is later determined that you did actually qualify monetarily based on more money in the quarter when you received the unreported money, if they decide those were, in fact, actual employer tax eligible wages, they could always tack them onto your claim, provided you had not exhausted the whole number of weeks of the claim at that time.

The system pulls up wages based on employer tax reports. These reports are employer submitted accountings of taxable wages paid to the employees in the specific quarters. Those reported wages are what unemployment taxes are paid to the system based upon. It's not a matter of how the claims examiner looks at it, its based on how it is reported in the employer tax reporting that is done by the company to cover their unemployment taxes. I don't really think you have a great chance of getting them to change the way they regard this particular chunk of income you accepted instead of unemployment taxed wages as a part of your quarterly income. That's just an opinion from outside, of course. But maybe they will see it as having been misreported by the employer, and will determine it was actually covered wages for unemployment purposes.

I don't see a downside to the monetary appeal, and I do not see as not filing it would be any benefit to you. You won't start drawing anything until they have a separation decision in place, and in pretty much the best case scenario, that's going to be about four to six weeks. If you make the directed certification for each week, you'll eventually be paid some amount for all the weeks since you've filed the claim.

My original monetary determination was for the $681, which is the maximum NJ weekly benefit. During my claims examiner interview, the claims examiner asked about why I earned so much more in the 4th quarter of 2016, since it stuck out like a sore thumb, and I said it was because of that bonus, and she said bonuses aren't counted in in your base year period, and she would forward my claim to the monetary department to see if that would make a difference in my weekly benefit rate. Then I checked my claim status and saw that I am now scheduled for a monetary interview on March 15th. I think it may be a case of she is wrong since she only handles separation issues, looking at those statutes I cited in my original post. I actually checked and covered wages really means just about everything but commission only income and self employment.

Okay if she is making a mistake, it will be caught at the level she has forwarded it to. It sounds from the above as though the bonus payment was reported to the employer tax collection system as wages and it is showing up in your monetary statement as part of your covered and counted wages. So there is a pretty good chance it will be considered part of your regular unemployment taxable wages for calculating your benefits if it was reported as such. But either way, it will not be your job to argue about it with them or quote statutes to them. They know a whole lot more about the system than you do, and it is not to the advantage of the system to keep you from drawing any part of the benefit you are actually eligible for according to unemployment law.

The thing is, you do not have the option of dropping the monetary appeal. If the base period wages seem out of synch and the monetary system is reviewing it, there's not an option to say, "Okay, forget about this, I'll just take less!" and stop the review and begin receiving your benefits any quicker.

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Quoting NJDevils1982

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I won't have to wait a month to receive a cent from unemployment.

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Don't kid yourself. NJ takes 6 to 8 weeks to adjudicate anything but the cleanest of lay offs. You say your employer said to put "at will." That's not a clean lay off in NJ's eyes. Because the state has "simple" misconduct with an 8-week delay to the start of benefits rather than just a complete denial in most any other state, NJ DOL will wait until the 8 weeks is just about up to make a decision. Then if you end up with no misconduct, you end up with a huge check of about 8-weeks worth of UI benefits, or you start getting paid UI from that moment forward because your "simple" misconduct penalty weeks have been served.

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Quoting chyvan

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Don't kid yourself. NJ takes 6 to 8 weeks to adjudicate anything but the cleanest of lay offs. You say your employer said to put "at will." That's not a clean lay off in NJ's eyes. Because the state has "simple" misconduct with an 8-week delay to the start of benefits rather than just a complete denial in most any other state, NJ DOL will wait until the 8 weeks is just about up to make a decision. Then if you end up with no misconduct, you end up with a huge check of about 8-weeks worth of UI benefits, or you start getting paid UI from that moment forward because your "simple" misconduct penalty weeks have been served.

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I know they take a long time. That's why I was so surprised that my non monetary interview was only 2 weeks after my claim. I said as little as possible, and when the claims examiner asked me about my last day, I said, "I was told they were going in a different direction." She asked if I had received any written warnings and I said no. She then said she would reach out to the employer and I provided her with the HR manager's number. Do you think I am right about my bonus being considered wages though?

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Quoting NJDevils1982

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Do you think I am right about my bonus being considered wages though?

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It's wages, and the UI worker doing what she did is going to result in a big waste of time that results in nothing changing.

I hope the monetary people see it that way. How do you think I did with my answers on my interview? I said as little as possible. Just said "I was told they were going in a different direction." She asked if I had received any warnings and I said no. She didn't press me at all. If the employer also says "At Will" I shouldn't have anything to worry about. "At Will" could be because your boss wanted his brother in law in the role instead of you. The HR manager even told me, "I would only fight unemployment if it was something really egregious like you stole from the company or you sexually harassed a co worker or if you threatened a co worker.

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Quoting NJDevils1982

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If the employer also says "At Will" I shouldn't have anything to worry about.

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What if they don't? Take $681 x 26 = $17,706 that's the potential of your UI claim that gets charged against your former employer's reserve account. They have a lot of incentive to tell you want you want to hear on your way out the door so that you leave quietly, and then they are free to present a case to UI to get you disqualified. In NJ, it's pretty tough to get someone entirely disqualified. The worst that usually happens is "simple" misconduct with an 8-week delay to the start of benefits. Just don't worry about it.

I still find it hard to believe that the claims examiner wouldn't know that a bonus is considered wages. Maybe she thought that because it was from the sale of the company and a one-time thing. The holiday bonuses were pretty automatic.

You are talking about state employees here. Nothing they do or say that is wrong should surprise you.

State employees are both good and bad. There's no point in blasting them in general or assuming a combative attitude toward them while you are dealing with state systems. It's a low paying, less than wonderful job which actually requires a lot of expertise that a lot of employees haven't been there enough to get or don't stick around to get.

Until civil service is abolished, there will be somewhere, someone up there, who knows exactly what the law is on this issue, and it will be fixed according to unemployment law. in the meantime, keep making certifications for weeks as they pass. The employer does NOT get to decide whether or not you are approved for benefits. "At will" simply means they have exercised their right to release you "at will." It does not mean they will later say they did not have a valid misconduct reason to terminate you, and the system will investigate that whole situation. It's much more important than the monetary amount of the claim discussion and side trail, as long as you had SOMETHING there to draw. But in any case, you are going to have several weeks in which you receive no benefits after you file an unemployment claim. These claims are not needs based, and they are required to assume that you are desperate or that you need your money immediately to live on, so it can take a while.

You would think that if my earnings in the first quarter seemed out of whack with the next 3 quarters in my base period they would have scheduled a monetary interview then and not waited until my claims examiner interview to question it.

"they" is a computer system. It does not question amounts on the monetary determination. I repeat, this is not delaying your claim. You must have approval on the separation issue by initial decision before you receive that first check.

It may delay the claim in my case. My weekly benefit amount came out to the maximum and the claims examiner forwarded it to monetary because she thought that big bonus shouldn't be counted towards my weekly benefit. They won't pay me in the meantime because if it turns out she is right that would mean I had an overpayment. It would be different if my benefit rate came to a lower amount and I said it should be more. Then they could pay me the lower amount and then pay the difference if they determined I was entitled to the higher amount. I actually had to call the HR manager at my former company on Friday for an unrelated reason, about my COBRA, and she told me the claims examiner called her. I didn't ask. She said that she was very pleasant and just asked her to confirm the dates of my employment and reason for separation. She said she just told her the position was going in a different direction, so I should be all set. That's pretty much the same thing I said in my interview. My claim status still says pended with the monetary interview scheduled for March 15th.

I have said it before, and I will no doubt say it again. In my state, which admittedly is not yours, a perfectly clean claim which the employer is not contesting and in which there is no possible question of the employee qualifying (and, I will add for this iteration, no question of what wages are to be included in the claim) will still take a minimum of two to four weeks between the date on which the claim is filed and the day you receive your first check.

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Quoting NJDevils1982

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she is right that would mean I had an overpayment.

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She's not, and the overpayment isn't like when a UI worker awards benefits and then a hearing disqualifies you. It's not holding you up. You are going to get something, and the amount may be unknown, but it's not big dollars, and the chances of recovery from future benefits are very high. NJ is not worried about the monetary issue.

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Quoting NJDevils1982

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She said she just told her the position was going in a different direction, so I should be all set.

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THIS here is the hold up. Until the separation issue is decided, NJ isn't going to release any money.

Maybe that HR manager is above board, but I've seen companies lie about these things before. Besides that, the worst that happens in NJ is "simple" misconduct with an eight-week delay to the start of benefits, and that is entirely up to the UI worker. They give "simple" even when it probably isn't "simple" because most NJ claimants won't appeal it because of the risk of being upgraded to "severe" at a hearing.

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Quoting cbg

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will still take a minimum of two to four weeks between the date on which the claim is filed and the day you receive your first check.

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I don't know the last time you put this to the test, but recent threads put the cleanest of claims in MA at 8 to 10 weeks.

I doubt if a really clean lack of work claim would take quite so long, but that's because all the states work under a "late first pay reporting" quality measure. This is a tracked measurement, and if the majority of claims take longer than a certain amount of time for first pay, the state's program comes under sanction by the fed and must take steps to remedy that problem.

But this is not a clean claim, there are obviously issues related to the separation issue. When the employer says, "At will" that doesn't mean they are approving the claim. They do not get to approve the claim. The unemployment system will explore whether there was a valid misconduct reason to terminate and will not accept that it was a simple lay off due to lack of work, which is what makes a clean claim, because that is not what the employer said. So don't think you and the employer are on the same page and it is the system that is against you because of the monetary determination issue.

You think that's what is holding up your claim, but whatever. Even if it is due to the total stupidity of the person who took your claim, there's no recourse here except that you will very likely eventually be paid exactly what you are due by law IF you are approved for the other relevant issues.

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Quoting chyvan

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I don't know the last time you put this to the test, but recent threads put the cleanest of claims in MA at 8 to 10 weeks.

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Which threads are those? Link them.

Even though Chyvan said that HR managers and employers often lie about not contesting, I believe the HR manager at my former employer is straightforward. I know what I said in my interview. I said, "I was told they were going in a different direction." She asked if I had any written warnings and I said "No." If the HR manager just said, "The position was going in a different direction," that sounds pretty straightforward. Neither of us raised a misconduct issue. For NJ, does my timeline sound pretty normal? I filed on Sunday, January 28th and had my interview this past Tuesday, February 13th. My claim still says it was pended.

Chyvan thinks she knows a great deal more than she actually does. I am an HR manager. Commentator worked inside the UI system for many years.

I don't see any problems with the timeline or with your collecting. I do think it may take some time to figure your monetary issues.

I think there is a reason the NJ Unemployment site says your weekly benefit is 60% of your wages in your base year period up to $681. It doesn't say your salary. It says wages. That seems to infer that bonuses do count. Although in my case if I lost my job in April and instead of January and had to file then, my weekly benefit rate would be less since by base year period would be January-December of 2017, and I got that bonus in December of 2016.

We're not the ones you have to convince.

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Quoting cbg

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I am an HR manager.

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That has never posted one thing that resulted in helping a UI claimant in a difficult situation get UI, and even supported commentator (while bashing me that I don't know what I'm talking about) on an incorrect opinion that probably caused the claimant to wait two extra months to reapply. Remember Isabella. Ultimately, Commentator changed her stance, but the thread was closed, and Isabella never got to ask clarifying questions.

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Quoting cbg

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Commentator worked inside the UI system for many years.

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Her knowledge is very TN centric.

Alrighty then.

Can I say for the record I think all three of you have been very helpful.

I had my monetary interview on Thursday just before 11. The monetary examiner called me. She said, "I don't see why this meeting was even scheduled." I said it was because of that $17,000 bonus. She said bonuses were not counted in counting unemployment claims. She took the $17,000 off and that brought my weekly benefit amount to $658. Not a big difference. Then she said, "I see that no determination was ever entered from your claims examiner interview on 2/13." She asked if I remembered who the claims examiner was. Luckily I had written down her name. I told her the name and she said, "I'll forward this back to her now so she can make a determination." I claimed again today and it still shows as pended and says, "Your claim is not payable at this time."

Now, they can get on with the business of fixing your unemployment claim by decision. As I said, what was holding you up was not totally the monetary issue. Sounds like your claim was taken by an uninformed person, possibly a newbie. If you hear nothing and nothing has changed by the middle of next week, you need to call and really drive to get it fixed, don't go through only the system, google the whole department, find a live person to speak with to check on it.

If the monetary examiner forwarded it on Thursday, it might possibly not have gotten put in by Friday. On Monday, though, start calling and trying to speak with a living human being who can put eyes on your claim and perhaps explain to you what is going on, and what step you are in the decision/approval process. There should somewhere be a U.I. Technical Support.

If necessary, go back and find the name and number of the monetary examiner and ask her to connect you with someone you can discuss the claim with. Things do fall through the cracks sometime, and people do need to be gouged. But as we repeatedly have told you, six to eight weeks isn't excessive to have to wait for the first check. But then now that you've heard that the first claims examiner has failed to put you in the system with an approval or denial decision, you need to push to make sure you're in, that a timely decision gets made and that you can get an initial decision, and hopefully backpaid at the correct amount for each of these weeks. If necessary, complain with the state commissioner's office or your state representative and work your way back down into the U.I. system. But speak with someone, find out what stage you're in and when you can reasonably expect to get out of "pending."

I actually just had a second interview with a good company and they asked me for references, so it looks like I may be going back to work in the next few weeks anyway. I hope this is resolved by then. I know Chyvan says NJ is very free with the 8 week simple misconduct penalty. If I am assessed that, it will have been up by now and my benefit will start now anyway. If I get the 8 week penalty, I plan to appeal. I know I didn't say anything in my interview to bring up misconduct. I said, "They told me they were going in a different direction." And the HR manager at my old company actually asked me about a week ago if my unemployment ever started. I called about my COBRA. She said that when the examiner called her, she just asked her to verify my dates of employment and then asked if my separation was for violation of company rules. She said, "No. We were taking the position in a different direction." I know Chyvan says a lot of employers concoct things, but I know the HR director to be a straight shooter. She said almost the same thing I did. I don't see how anyone can make a case of simple misconduct out of that. The HR manager even said, "If you need to appeal, we will have your back. Don't worry about it."

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Quoting NJDevils1982

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She said bonuses were not counted in counting unemployment claims. She took the $17,000 off and that brought my weekly benefit amount to $658.

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In your first post, you referred to the $17K as a "transactional" bonus, and that there was a buy out. Originally, I took "transactional" to mean it was because of your work and that you performed transactions. Now, I'm not so sure what you meant. Is it possible that the money would have been yours regardless of whether you were retained by the new owner? If so, then it's more like severance (starts to get fuzzy) than wages (work for money). Depending on your answer, you might want to revisit the issue because there is approximately 7 weeks of UI on the table for $161, and if you don't get that new job, it might be worth your time to appeal especially if you have to appeal anyway because you get hit with "simple" misconduct.

For $23 a week, I don't think it is worth appealing.

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Quoting NJDevils1982

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For $23 a week, I don't think it is worth appealing.

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You have to look at it in the totality. Right now, it's $161, and if you don't get that new job and need all 26 weeks, it's $598. After 26 weeks on UI, that $598 might mean the world to you. I'd put some more thought into it.

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Quoting NJDevils1982

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She said, "I don't see why this meeting was even scheduled."

I said it was because of that $17,000 bonus. She said bonuses were not counted in counting unemployment claims. She took the $17,000 off and that brought my weekly benefit amount to $658.

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If all you said was ". . . the bonus," then she was a little too quick to remove the wages. This is a classic case of a claimant getting the short end of the stick by what comes out of their own mouth. It depends on WHAT kind of bonus it is.

We'll see. I was terminated on 1/26/18. It has been 7 weeks. So even if I got hit with simple misconduct, that would be over now right? I will definitely appeal if I get hit with that. I would be less eager to appeal if I knew that I said "I was fired for coming in late" or "I was fired for internet use at work" or something like that. I know that I just said, "I was told they were going in a different direction."

You should definitely have heard something regarding where you are in the claims process, either a first decision or a lot of questions from their adjudicator. If your employer confirmed that you were laid off due to them going in a different direction when contacted, there should've been an approval by now, based upon separation regardless of the monetary issue. My suspicion is that that the original claims taker misplaced it or failed to pass it on due to the monetary issue, and they haven't worked it or issued a decision on it yet. The only thing you can do is persist in trying to find out what the status of the claim is and encourage them to work it through the system. The odds of both of these agency workers not knowing whether this bonus issue is countable or not is getting rather slim. But as I have said repeatedly, you have money enough to set up a claim, you should be hearing about whether this claim is approved or denied by now. And if you do get dropped out, or lost in the system, it is very much UP TO YOU to keep asking and keep pushing to find out why the delay and what is the status.

What you said when you filed the claim isn't the issue as much as it is what the employer said when they were contacted, which it doesn't sound like that part of the claims adjudication has been done if you haven't received any follow up questions about it or any information about whether you are approved or denied in seven weeks. So call them.

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Quoting comment/ator

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it is very much UP TO YOU to keep asking and keep pushing to find out why the delay and what is the status.

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By NJ standards for a fired claimant (regardless that it looks nondisqualifying), you are not behind schedule yet. I wouldn't waste the time on hold with the NJ DOL yet. What you're experiencing is not an uncommon story.

If this claim has, indeed, fallen through the cracks, waiting any longer to go on hold, find a live human will not accomplish anything. What else does the claimant have to do?

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Quoting comment/ator

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What else does the claimant have to do?

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I dispute that it's fallen through the cracks. I'm certain the OP applied under a "fired," status. He had a nonmonetary interview. He knows his employer has been contacted. He had a call on a monetary issue. All of that says that NJ is doing it's typical 8-week delay either to assess the 8-week disqualification or to prepare to pay him in a lump sum for the 8 weeks that have been suspended. He needs to wait another week, and spare himself a 3 hour wait on hold if he can even get into the calling queue.

Update. I got an email from the NJ DOL today saying:

An Unemployment Insurance benefit payment in the amount of $ 4606.00 has been processed and
sent to the bank for deposit into your DIRECT DEPOSIT account.

Please allow up to 2 business days for the funds to appear in your account.

If a holiday falls within this period, please allow an additional day for processing.