A New Jersey appellate court has ruled for the first time that an employee who provides services to a state business through telecommuting is not eligible for New Jersey unemployment benefits. The case surrounds a Deutsche Bank employee who provided services to her company’s New Jersey office but telecommuted out of her home in North Carolina. She was ruled as ineligible for unemployment benefits because she wasn’t physically present in New Jersey when she performed her work.
The ruling is not a surprise. New Jersey’s unemployment compensation statute establishes four tests that must be applied to determine the appropriate location for filing unemployment benefits. The first test is localization. Localization determines if:
- The employee’s services are performed entirely within the state; or
- The services are performed both within or outside the state, but the service performed outside the state is incidental to the individual’s service within the state (e.g., it is temporary or transitory in nature or consists of isolated transactions).
In this New Jersey case an employee of Deutsche Bank performed all of her job duties from her home in North Carolina. The employee was laid-off and applied for unemployment benefits in New Jersey.
The New Jersey Unemployment Compensation Appeal Tribunal denied the Deutsche Bank employee’s claim for benefits, finding she was ineligible for unemployment compensation because she didn’t establish that she earned wages in New Jersey. The decision was appealed and upheld.
This case is a great reminder to employers with telecommuters to make sure they know what unemployment laws govern their remote employees – and help those employees find their proper benefits following dismissal.
Hat-tip: Business and Legal Resources