On appeal from the Department of Labor and Industry.
Allcorn, Francis and Morton I. Greenberg. The opinion of the court was delivered by Morton I. Greenberg, J.A.D.
Appellants appeal from the adoption on October 23, 1980 of a regulation, N.J.A.C. 12:17-10.1 et seq. , which specifies circumstances in which the Director of the Division of Unemployment and Temporary Disability Insurance will seek to recover or waive recovery of overpayments of unemployment benefits improperly paid to recipients of unemployment compensation. R. 2:2-3(a). Appellants have been determined in appropriate administrative proceedings to have been paid unemployment benefits not properly due under the Unemployment Compensation Law, N.J.S.A. 43:21-1 et seq. Thus, since respondents apparently propose to apply the regulation to appellants' indebtedness, no question is raised as to their standing to prosecute this appeal.
The regulation was adopted as a response to this court's decision in Howard v. Board of Review , 173 N.J. Super. 196 (App.Div.1980).*fn1 There we held that when it is administratively determined that a person has been paid unemployment benefits not properly due, the Director of the Division of Unemployment and Temporary Disability Insurance should determine if a refund of the improper payment must be made. In reaching this
result we applied the plain language of N.J.S.A. 43:21-16(d), which provides that when payments have been improperly made, "such person shall be liable, if the director in his discretion directs recovery, either to have such sum deducted from any future benefits payable to him under this [Unemployment Compensation Law] or to repay to the division for the unemployment compensation fund, a sum equal to the amount so received by him. . . ." Howard departed from our prior decision in Castellucci v. Board of Review , 168 N.J. Super. 301 (App.Div.1979), which had ruled that an appeal tribunal, an administrative body established to hear appeals from initial decisions under the law, (see N.J.S.A. 43:21-6(d)), could order refunds. Subsequent to Howard, Castellucci reached this court after a remand and we adhered to our result in Howard. See Castellucci v. Board of Review , 174 N.J. Super. 289 (App.Div.1980).
Our decision in Howard triggered an administrative response. When we decided that case it appeared that while the Department of Labor and Industry in a technical sense had contended that only the Director of the Division of Unemployment and Temporary Disability Insurance could order a refund of overpayments, in fact the determination that there was to be a refund was de facto being made by an appeal tribunal or the Board of Review, the highest administrative agency making adjudications under the law. See N.J.S.A. 43:21-10(d). Howard ruled that "the clear statutory authority for the ordering of refunds reposes solely, exclusively and personally in the Director." 173 N.J. Super. at 202. Thus, the Director was required to change his procedures which had relied on an appeal tribunal or the Board of Review.
The response to Howard was adoption by the Commissioner of Labor and Industry of the regulation now appealed, N.J.A.C. 12:17-10.1 et seq. That regulation reads as follows:
SUBCHAPTER 10. DETERMINATION AND DEMAND FOR REFUND OF UNEMPLOYMENT BENEFITS
12:17-10.1 Issuance of demand for refund
A demand for refund of unemployment benefits will be issued in each case when a determination of overpayment is made.
12:17-10.2 Full waiver of recovery of ...