Initial Review

• The New Jersey Department of Labor and Workforce Development's initial monetary review looks at an applicant's total wages earned during a base period of employment. A base period of employment consists of the first four of the last five quarters an employee worked before unemployment or reduction of hours. An employee must have 20 or more weeks of covered wages during a base period. Covered wages are wages paid by an employer paying payroll unemployment taxes to fund the state's unemployment insurance benefit fund. If an applicant is monetarily eligible, the department conducts another review to determine non-monetary eligibility.
  
  

Secondary Review

• The labor department conducts a non-monetary determination review to establish whether an applicant's reason for unemployment or reduced hours is for a lack of work. According to New Jersey law, applicants must be unemployed for a lack of available work. Generally, an applicant who quits without good cause, was discharged for violating company policies or discharged for poor performance is not eligible for unemployment benefits.
  
  

Limitations

• Typically, a salesperson without wages will not monetarily qualify for unemployment benefits. If a salesperson does not receive hourly wages in addition to his commission, he is most likely a sole proprietor or self-employed. Under the New Jersey Unemployment Compensation Law, sole proprietors are not required to pay unemployment taxes on their profits or income. However, companies who hire sales persons will have to pay unemployment taxes, unless they are independent contractors. Wages, under the New Jersey definition of income, includes hourly wages, tips and commission and may include other income, such as pension and vacation pay.
  
  

Coverage Exceptions

• Sole proprietors can waive self coverage but must pay unemployment insurance taxes on all other employees, except for children who work for their parents. New Jersey law also limits coverage for independent contractors, and generally, independent contractors are not eligible to receive unemployment benefits. The state conducts a case-by-case analysis to establish whether an applicant was an independent contractor or an employee. If an employer had control over the applicant's daily work and services, the state will most likely consider him an employee; not an independent contractor. Sales employees can receive unemployment benefits if they have a sufficient amount of base earnings.
  
  

Considerations

• Since state laws can frequently change, do not use this information as a substitute for legal advice. Seek advice through an attorney licensed to practice law in your state.