43:23-31 Penalties for noncompliant employers.

19. a. An employer who fails without reasonable cause to enroll any employee who has not opted out of participation in the program within the time prescribed under section 14 of this act shall be subject to:

(1) for the first calendar year during which at any point a violation occurs, a written warning by the department;

(2) for the second calendar year during which at any point a violation occurs, a fine of $100;

(3) for the third and fourth calendar year during which at any point a violation occurs, a fine of $250 for each employee who was neither enrolled in nor opted out of participation in the program; and

(4) for the fifth and any subsequent calendar year during which at any point a violation occurs, a fine of $500 for each employee who was neither enrolled in nor opted out of participation in the program.

b. An employer who collects employee contributions but fails to remit any portion of the contributions to the fund shall be subject to a penalty of $2,500 for a first offense, and $5,000 for the second and each subsequent offense.

c. After a determination that an employer is subject to penalty pursuant to this section, the department shall issue a notice of proposed penalty to the employer. For purposes of subsection a. of this section, the notice issued by the department to the employer shall state the number of employees for which the penalty is proposed under paragraph (3) or (4) of subsection a. of this section and the total amount of penalties proposed. For purposes of subsection b. of this section, the department shall issue a notice of proposed penalty to the employer stating the total amount of penalties proposed under subsection b. of this section. Upon the expiration of 90 days after the date on which a notice of proposed penalty was issued, the penalties specified therein shall be deemed assessed, unless the employer had filed a protest with the department under subsection d. of this section. If, within 90 days after the date on which the notice of proposed penalty was issued, a protest is filed under subsection d. of this section, the penalties specified in the notice shall be deemed assessed when the decision of the department with respect to the protest is final.

d. A written protest against the proposed penalty shall be filed with the department in a form prescribed by the department, setting forth the grounds on which the protest is based. If a protest is filed within 90 days after the date the notice of proposed penalty is issued, the department shall reconsider the proposed penalty and shall grant the employer a hearing. As soon as practicable after a reconsideration and hearing of the protest filed by the employer, the department shall issue a notice of decision to the employer, setting forth the department's findings of fact and the basis of decision. The decision of the department shall become final.

e. As soon as practicable after the penalties specified in a notice of proposed penalty are deemed assessed, the department shall give notice to the employer liable for any unpaid portion of the penalty, stating the amount due and demanding payment. The department shall provide a payment plan to employers for purposes of complying with the demand of payment for the penalty.

f. An employer who has overpaid a penalty assessed under this section may file a claim for refund with the department. A claim shall be in writing in a form prescribed by the department and shall state the specific grounds upon which it is founded. As soon as practicable after a claim for refund is filed, the department shall examine it and either issue a refund or issue a notice of denial. If a protest is filed, the department shall reconsider the denial and grant the employer a hearing. As soon as practicable after the reconsideration and hearing, the department shall issue a notice of decision to the employer. The notice shall set forth briefly the department's findings of fact and the basis of decision in each case decided in whole or in part adversely to the employer. A denial of a claim for refund shall be final 90 days after the date of issuance of the notice of the denial, except for those amounts denied as to which the employer has filed a protest with the department. If a protest has been timely filed, the decision of the department shall become final.

g. No notice of proposed assessment shall be issued with respect to a calendar year after June 30 of the fourth subsequent calendar year. No claim for refund may be filed more than one year after the date of payment of the amount to be refunded.

h. Whenever a notice is required by this section, it shall be issued by first class mail addressed to the person concerned at the person's last known address.

i. All books and records and other papers and documents relevant to the determination of any penalty due under this section shall, at all times during business hours of the day, be subject to inspection by the department or the department's authorized representatives.

j. The department shall require employers to report information relevant to their compliance with this act on their State income tax return. Failure to provide the compliance information requested shall not cause the income tax return to be treated as unprocessable for purposes of the applicable tax law.

k. For purposes of any provision of State law allowing the department or any other agency of this State to offset an amount owed to a taxpayer against a tax liability of that taxpayer or allowing the department to offset an overpayment of tax against any liability owed to the State, a penalty assessed under this section shall be deemed to be a tax liability of the employer and any refund due to an employer shall be deemed to be an overpayment of tax of the employer.

l. Except as provided in this subsection, all information received by the department from returns filed by an employer or from any investigation conducted under the provisions of this act shall be confidential, except for official purposes within the department or pursuant to official procedures for collection of penalties assessed under this act. No provision of this subsection shall be construed as prohibiting the department from publishing or making available to the public reasonable statistics concerning the operation of this act wherein the contents of returns are grouped into aggregates in such a way that the specific information of any individual employer shall not be disclosed. No provision of this subsection shall be construed as prohibiting the department from divulging information to an authorized representative of the employer or to any person pursuant to a request or authorization made by the employer or by an authorized representative of the employer.

m. The department may charge the board a reasonable fee for its costs in performing its duties under this section to the extent that those costs have not been recovered from penalties imposed under this section.

n. This section shall become operative nine months after the board notifies the department that the program has been implemented. Upon receipt of the notification from the board, the department shall immediately post on its Internet website a notice stating that this section is operative and the date that it is first operative. This notice shall include a statement that, rather than enrolling employees in the program under this act, employers may sponsor or provide coverage under an alternative arrangement, including, but not limited to, a defined benefit plan, 401(k) plan, a Simplified Employee Pension (SEP) plan, a Savings Incentive Match Plan for Employees (SIMPLE) plan, a plan sponsored by an employee leasing company or professional employer organization with which the employer has an employee leasing agreement or professional employer agreement as such terms are defined in section 1 of P.L.2001, c.260 (C.34:8-67), or an automatic payroll deduction IRA offered through a private provider. The board shall provide a link to the vendor Internet website described in subsection j. of section 14 of this act.

L.2019, c.56, s.19.