Employers Brace for More Labor Bills: Workers' Comp, Family-Leave Mandates Top List
The New Jersey Legislature has announced a busy schedule of committee hearings this fall, and employers may face another round of antibusiness bills affecting the workplace. Many companies are still absorbing the impact of the $1 billion business tax hike and costly project labor agreement bill pushed through by Governor McGreevey this spring. The latest proposals threaten to overturn long-standing New Jersey laws in areas ranging from workers' compensation and unemployment insurance to family leave requirements.Here are just a few of the bills that may be considered by the Assembly and Senate Labor Committees this fall. Concerned employers should tell their legislators to oppose these bills!
Eliminating Employer Choice of Physician in Workers' Compensation Cases
A-554/A-573 (Impreveduto/DiGaetano)
S-1075 (Kavanaugh, Littell)
This bill threatens to devastate New Jersey's successful program for helping workers injured on the job. Our workers' compensation system is the envy of many states, providing steadily rising levels of benefits to sick or injured workers but at a cost to employers that actually fell for six years during the 1990s.
The system's success is due in large part to the ability of employers to select the treating physician when an employee is first injured. The company can select medical providers with a special understanding of workplace injuries, who will keep employees out of work for as long as they need to recover, but will not waste money by prescribing weeks or months of unnecessary time off.
The new bills rip the heart out of the workers' compensation program by allowing employees to choose the treating physician. This opens the door to costly abuse by allowing workers to shop for doctors willing to prescribe extended periods of time off, far beyond what is medically necessary. The temptation to push for extra time is great, since workers' compensation provides significant income support as well as payment of all related medical bills.
Opposition to A-554/A-573/S-1075 is widespread. Business groups and insurers are strongly against this attack on a successful system. When the bills were discussed in the Assembly Labor Committee this spring, even the attorneys and physicians that represent the injured workers warned that unlimited "employee choice" would disrupt a system that works well for employer and employee alike.
Back-Door Paid Family Leave/Unemployment Insurance Changes
A-2350 (Friscia)
S-1489 (Sweeney)
Not satisfied with blowing up New Jersey's workers' compensation system, some legislators are eager to gut the state's Unemployment Insurance (UI) program and impose a back-door paid family leave requirement on employers. This bill seeks to hijack a $242 million federal grant in order to enact a list of radical UI changes that organized labor has failed to get from the Legislature for years.
The money, provided to New Jersey in June, is supposed to help pay for extended benefits to jobless workers and fund employment services within the New Jersey Department of Labor. The sponsors, however, want to use the grant to trash current UI eligibility standards and open up the system to a wild list of new rules:
- Back-Door Paid Family Leave
Employees working as few as 15 hours a week could receive up to 26 weeks of unemployment payments to care for a child under 18. The leave benefit would also extend to workers caring for a sick child, parent or spouse. This would apply to nearly all employers. - Instant Maximum Benefits
Any employee who works long enough to qualify for unemployment insurance would automatically qualify for the maximum UI benefit period of 26 weeks. Currently, someone who has worked for the minimum period could be limited to as few as two weeks of UI payments. - No Search for Full-Time Work
Claimants would no longer be required to show good cause for seeking part-time rather than full-time employment in order to receive UI support. They could remain on a permanent quest for jobs by working as few as 15 hours per week. - Rejection of Suitable Work
The bill directs the NJ Department of Labor to concoct a "self-sufficiency" threshold for each worker, based on their cost of housing, transportation, etc. The Department would then determine the wage that each worker "ought" to be earning, and allow him or her to stay on unemployment until they are offered a wage at that level.
Are we having fun yet?Instant Unionization
A-1320 (Egan, Friscia)
S-665 (Smith)
This astonishing bill provides that certain nonunion employers can be instantly organized by a union if that union collects cards from more than 50 percent of the workforce indicating an "interest" in having collective bargaining. Most companies enjoy the protection of the National Labor Relations Act, which requires that a card collection be followed by an election in which the employer has a chance to explain their preference to remain nonunion. Employees then vote on unionization in a secret ballot, free from coercion by union organizers, coworkers or management. In a majority of elections, employees decide to remain nonunion-even when a majority initially signed cards. NJBIA strongly believes that NO employer should be organized without having the employees vote in a secret ballot.
"Special Needs" Paid Leave
A-831 (Conaway, Doria)
S-126 (Bennett, Cafiero)
Here's a mandate of 24 hours of job-protected paid leave per year that employers of 50 or more would be required to provide to workers with children in public schools. It must be offered in addition to any existing paid time off for sickness, vacation or personal days, and in addition to unpaid state and federal family leave.
The leave is supposed to apply to children with "special needs." "However, parents themselves are allowed to determine that their children under 18 have special needs for a vague range of "behavior," "social," or "lateness" problems that could apply to virtually every teenager in New Jersey.
For workers to qualify for this leave, the parents, teachers or school administrators need only make an informal determination that a child has special academic or disciplinary issues. An Individualized Education Plan is not required. A determination of a disability by a child study team is not required. No medical certification is necessary.
The leave time can be used in any increment of time within the 24-hour cap for school conferences and meetings. It is an absolute entitlement, no matter how much it disrupts the workplace. An employer who questions the need for any of these conferences can be subject to fines of $2,000 to $5,000 for "interfering" with the employee's leave request. The employer may also be charged punitive damages of up to $500,000 in a class action lawsuit.
Contact your state legislators without delay and tell them these antibusiness bills will hurt your business and the New Jersey economy. Information on reaching your Senate and Assembly representatives is available at www.njbia.org/conlaw.htm on NJBIA's Web site. NJBIA's popular Legislative Directory, with information on all 120 legislators, can also be obtained by calling 609-393-7707.
EDA Offers Financing for Business Investment, Expansion
Employers seeking to expand their business in the state should consider the resources available to them through the New Jersey Economic Development Authority (EDA). The EDA has at least 14 programs designed to help businesses fund capital expansion projects and other investments. Since 1974, it has provided more than $15 billion in financing assistance to New Jersey manufacturers, high technology businesses, new entrepreneurs, women- and minority-owned businesses, service providers, retailers and other businesses.
EDA's Business Financing Programs include:
- Direct Loan Program: loans for businesses unable to get conventional bank credit;
- Statewide Loan Pool for Business: loans and loan guarantees up to $5 million in partnership with a bank;
- Bond Financing: long-term, low-interest loans for real estate acquisitions, equipment, machinery, construction and renovations;
- Downtown Beautification Program: loans up to $100,000 for renovations and facade improvements;
- SBA 504 Program: loans up to $1 million (but no more than 40 percent of a project's cost) for fixed assets;
- Small Businesses, Minority-Owned and Woman-Owned Enterprises: loans up to $200,000 for real estate, fixed assets and working capital;
- Contractors Assistance Program: training, loans and guarantees to small, minority-owned and woman-owned contracting businesses;
- Underground Discharge Site Remediation, Upgrade and Closure Fund: loans up to $1 million and grants to $250,000 for upgrading, closing, or remediating oil tanks;
- Business Employment Incentive Program: grants to businesses expanding or relocating to New Jersey based on new employment;
- NJ Seed Capital Program: loans to help technology companies bring new products to market;
- NJ Technology Fund Program: below-market rate loans and loan guarantees up to $5 million for second-stage technology businesses;
- Local Development Financing Fund: loans and guarantees up to $2 million for commercial and industrial projects in Urban Aid communities;
- Hazardous Discharge Site Remediation Program: loans and guaranties up to $1 million for site investigation and clean-up;
- Entrepreneurial Training Institute: eight-week course in business planning for new entrepreneurs.
For more information, contact the EDA at 609-292-1800 or visit their Web site at www.njeda.com.
Event Highlights High-Tech Exports to Russia
This fall, the Mid-Atlantic Russia Business Council will host two major events highlighting export trade opportunities in the areas of science and technology. New Jersey employers are invited to participate.On Wednesday, October 16, the Council will sponsor a seminar on "Russian Science & Technology Opportunities for US Business." Panelists from US corporations will discuss their experience with basic and applied research projects as well as technology transfer and technology development. The US State Department will describe programs being run through science centers in Moscow and Kiev for businesses interested in biotechnology, communications, transportation and the environment. The meeting will be held at Villa Roberto, 70 West Passaic Street in Rochelle Park, NJ.
Employers in Central and South Jersey may also be interested in the Russian-American Innovation Technologies Trade Show hosted by the Council on November 12-14 at the Valley Forge Convention Center, north of Philadelphia. More than 100 Russian business executives and government officials will discuss advanced technology projects in industries ranging from biotechnology and energy to information technology and aerospace. Corporations and entrepreneurs will find vendor displays from companies in both countries as well as panels on financing, licensing and patents.
For details on these high-tech events, contact Mr. Val Kogan at 215-708-2628 or prbc@att.net. Or see the Council's Web site at http://fita.org/prbc.
NEW JERSEY EMPLOYMENT WATCH
Strong Headwinds Buffet New Jersey Economy
New Jersey's employment picture finally brightened in July, with a gain of 3,400 jobs in the private sector, the first increase this year. The state's unemployment rate also declined, falling to 5.4% in July from 5.6% the month before.The employment increase included an encouraging if unspectacular gain of 2,500 jobs in services and a rare gain of 1,000 jobs in manufacturing. Assuming the July data is not revised downward, this would be the first rise in manufacturing employment since December 2000. Significant gains came in fabricated metals (+300) as well as printing and publishing (+600).
A one-month gain, however, does not make a trend. Even with this increase, the state's private sector has lost a net 33,100 jobs since July 2001 when the recession began. At least one other indicator shows the regional economy losing strength.
After making steady gains in the first half of the year, manufacturing activity in the Philadelphia region (which includes South Jersey) fell markedly in July, then tripped into negative territory in August, according to the Philadelphia Federal Reserve Bank's monthly survey. Economist say this calls into doubt the durability of the fledgling manufacturing recovery in New Jersey and the nation.
Indeed, the national economy has shown disturbing signs of weakness in recent months.
Overall economic growth slowed dramatically in the second quarter, with gross domestic product rising an anemic 1.1%, down from first quarter growth of 5%. Slower consumer spending and a falloff in commercial construction led the retreat. In July, employment growth slowed to a crawl and a promising manufacturing recovery faltered.
In addition, the Commerce Department reported that the 2001 recession was longer and deeper than originally thought. The downturn produced three quarters of economic decline, not just one. This put overall growth for the year at a marginal 0.3%.
The summer slowdown was so severe that the Federal Reserve Board, convinced a few weeks earlier that the recovery was on track, announced in August that economic weakness was again a greater risk than inflation. However, the Fed held short-term interest rates steady in August, keeping its benchmark bank-lending rate at a 41-year low of 1.75%.
Of particular concern to the Fed and many economists has been the spectacular failure of investor confidence inspired by the corporate accounting scandals and one of the worst bear markets in a century. The loss of trillions of dollars in stock market value over two and a half years has transformed the "irrational exuberance" of the 1990s bull market into a profound pessimism.
While most economists say a double-dip recession is unlikely, the recent data has made this a less remote prospect than in the spring when the economy was gathering momentum.
Assuming the state economy doesn't stagger back into recession, however, the 2001 recession will go on record as the second mildest in half a century. The current recession has cost New Jersey 33,100 private-sector jobs, a spit in the bucket compared to the state's 1989-92 recession, a 38-month slide that destroyed more than a quarter of a million jobs.
