500 Pack Woodbridge Hotel for NJBIA Briefing on NJ Paid Family Leave Act Read
NJBIA Thanks Its Sponsors! Read

Paid Family Leave Is Now Law, But Other Pending Bills Could Affect Your Workplace Read
Ask the Experts: NJ's Paid Family Leave Law Read
NJ Employment Watch Read

More than 500 NJBIA members, who attended two briefings in Woodbridge on July 22, were among the first to learn about New Jersey’s second-in-the-nation paid leave law and how it will affect their businesses.

They learned that every New Jersey employer, no matter how small, will have to comply with the NJ Paid Family Leave Act.  They also learned that compliance with the new law will be complicated by how it overlaps with State and federal laws that already provide for unpaid leave, temporary disability benefits, and protection against discrimination.

Two employment law experts who spoke at the briefing said some areas of the law will remain murky even after the NJ Department of Labor issues its rules and procedures this fall. 

"The bad news is that we have no idea what’s to come," said Katherin Nukk-Freeman, a partner with the law firm of Nukk-Freeman & Cerra P.C.  "The interpretation of the law most likely awaits litigation."

The law does not require small employers (those with 2-49 employees) to hold the jobs of employees taking paid leave, said attorney Kathleen M. Connelly.  However, she said, if a small employer does terminate an employee on leave, they could become the target of a lawsuit challenging that exemption.

"If you let employees go, you may well end up being a test case!" said Connelly, an employment law specialist with Lindabury, McCormick, Estabrook & Cooper P.C.

The paid leave act, signed in May by Governor Jon Corzine, provides six weeks of paid leave annually for employees who need to care for a newborn or adopted child or a seriously ill family member. 

To pay for the program, the new law will increase payroll taxes on all workers starting January 1, 2009.  Starting on July 1, 2009, eligible employees will be able to take up to six weeks of paid leave.  They will receive two-thirds of their normal pay, up to a current maximum of $524 per week. 

NJBIA Vice President John Rogers, who moderated the program, pointed out that while the new law will be a burden to New Jersey employers, it would have been much worse if NJBIA members hadn’t opposed the bill in such large numbers.  NJBIA member companies sent more than 20,000 messages to legislators as the bill was coming to a final vote in the spring.

New Jerseyans are the most heavily taxed residents in the nation, paying 11.8 percent of their per capita income for State and local taxes, according to a new study by the Tax Foundation.  New Jerseyans in 2008 will pay an average of $6,610 per capita in State and local taxes.

While this is the third straight year New Jersey topped the tax chart, the State’s State-and-local tax burden did drop a tenth of a percent from 11.9 percent in 2007.

New State environmental rules giving the public access to all tidal waterways, even those fronting industrial plants, should be amended to provide access only to beaches, NJBIA told the Senate Environment Committee on August 7.
NJBIA testified in favor of limiting the new rules, which were adopted by the NJ Department of Environmental Protection (DEP) in December.  They require any property owner along any tidal waterway to provide public access to that waterway through their property.  If they cannot provide access, the owner must pay the DEP to have that access provided elsewhere.

NJBIA Vice President David Brogan told the committee it was unsafe to give the public access to properties occupied by energy plants, ports, chemical plants, refineries, and military installations.  He said the rules amounted to a new tax on these and other such facilities.

"The new rules are a poster child for DEP rules gone amok," said NJBIA President Philip Kirschner.  "Rules that were supposed to provide beach access in some shore communities have evolved into rules that give the public access to tidal waterways in front of chemical plants - as if anybody was really going to swim there."

Visit www.njbia.org/issues_environ.asp for more information.

If New Jersey’s Energy Master Plan is going to achieve its goals of reducing carbon emissions, cutting energy consumption, and providing reliable energy at a reasonable cost, it must take a number of actions, NJBIA said in its comments on the draft plan.  The plan must:

• Reduce energy taxes and fees.  Under the plan, fees and taxes would comprise 20 percent of a business’s energy bills.
• Provide more financial energy-efficiency assistance for businesses.
• Limit building codes mandating energy efficiency.

Once adopted, the plan will guide New Jersey’s energy policy over the next 12 years.  Visit www.njbia.org/issues_energy.asp for more information. 

NJBIA would like to thank its Premier and Grand sponsors and acknowledge their generosity.  Please visit their Web sites to learn more about these outstanding companies.

Premier

NJM Insurance Group

The Port Authority of New York & New Jersey

Grand

BP

Horizon Blue Cross Blue Shield of New Jersey

Jackson Lewis LLP

Jersey Central Power & Light Co., a FirstEnergy Company

United Water New Jersey

Verizon

SAVE THE DATE!

Friday, October 17
Meet the Decision Makers:
Environmental Regulation and Legislation
Meet NJ Department of Environmental Protection Commissioner Lisa Jackson and the respective chairmen of the Senate and Assembly Environment Committees, Bob Smith, John McKeon and Senator Christopher "Kip" Bateman, in the final event of our 2008 Decision Makers series.  They will discuss State environmental policy, laws and regulations.  Plenty of time will be set aside to answer your questions.  The briefing will be held at Forsgate Country Club, Monroe Township (NJ Turnpike, Exit 8A), beginning with registration and a buffet breakfast at 7:45 a.m. and ending at 10:00 a.m. The cost to attend is $69 per person for NJBIA members and $105 per person for nonmembers. Register online now, or contact at 609-393-7707, ext. 213, for more information.  To become a high-visibility sponsor, contact ext. 219.

Wed., November 5
Awards for Excellence Dinner
NJBIA member companies that have achieved excellence in activities related to human resources management, environmental quality, public service, and job creation will receive NJBIA’s Award for Excellence during this awards dinner.  The Awards for Excellence program recognizes companies of every size and in every industry.  The program, to be held at the Pines Manor in Edison (Route 27), will begin at 6:00 p.m.  It will include a reception, dinner and the awards presentations.  The cost is $149 per person.  Tables of 10 are available. Register online now, or contact at 609-393-7707, ext. 213.  To become a sponsor, contact ext. 219.

Friday, November 14
Health Insurance:  How to be a Savvy Purchaser
At this half-day seminar, top industry experts will show you how to shop for health insurance for your business.  Whether you are a small or medium-sized business owner, human resource manager, benefits specialist, or anyone involved in selecting healthcare coverage for your company, this is one seminar you should not miss!  It will be held at the Woodbridge Hotel and Conference Center in Iselin, starting at 8:30 a.m. and ending at 12:30 p.m.  The cost to attend is $119 per person for NJBIA members and $149 per person for nonmembers. Register online now, or contact at 609-393-7707, ext. 213, for more information.  To become a high-visibility sponsor, contact ext. 219.

Tuesday, December 9 Public Policy Forum
This high-level policy conference, being held from 7:45 a.m. to 2:00 p.m. at the Woodbridge Hotel and Conference Center, will bring together NJ’s top leaders in business and government for a thorough discussion of issues such as healthcare, taxes, energy and the environment.  The cost to attend is $170 per person for NJBIA members and $230 for nonmembers.  Breakfast and lunch are included. Register online now, or contact at 609-393-7707, ext. 213, for more information.  To become a high-visibility sponsor, contact ext. 219.

PAID FAMILY LEAVE SEMINARS

Friday, October 24
Sheraton, Eatontown

New Jersey has become only the second state to pass a broad paid family leave mandate affecting all employers.  Starting next year, your employees will be able to take six weeks of paid family leave benefits to care for a sick family member or a newborn or adopted child.  At these identical seminars, the following top legal experts will explain your rights and responsibilities as an employer:  Patricia Smith, Esq., Ballard Spahr Andrews & Ingersoll, LLP; David Islinger, Esq., Jackson Lewis LLP; and Ian Meklinsky, Esq., Fox Rothschild LLP.  They will also explain how the new law will impact your workplace and how it will work with existing State and federal unpaid leave laws.  Learn how to protect yourself and your business!  Both seminars will begin at 8:30 a.m. and end at 1:00 p.m.  The cost to attend is $129 per person for NJBIA members and $169 for nonmembers. Register online now.

Employers are justifiably upset with the State’s new Paid Family Leave Act, which makes New Jersey only the second state to provide employees with six weeks of paid time off to care for family members.  This new law applies to all New Jersey employers, regardless of size. 

NJBIA is working hard to provide its member companies with useful information about paid leave, and details of this new law are described elsewhere in this issue of Workplace Report.  But we also wanted to let you know about other laws the State Legislature might consider that could have a big impact on your operations.

One such bill would mandate rest breaks at all workplaces.  Another would finally end New Jersey’s misguided policy of diverting payroll taxes to pay for unrelated budget expenses.  These and the other bills described below could see action before the current legislative session ends.

Reduction of Employer UI Tax Obligations - During periods of low unemployment, S-562 (Sweeney, Sarlo) would return to employers a portion of taxes they have paid into the Unemployment Insurance Trust Fund.  NJBIA supports this bill, as it would lead to greater business investment and expansion.  The bill establishes a formula that would lower employer UI taxes when the fund balance rises above a certain point.  This would provide direct tax relief to employers and reduce the likelihood that the State would raid the UI fund for unrelated budget expenses.  The bill would ensure that the fund is robust enough to meet its obligations, but doesn’t build up such a big balance that the State is tempted to raid UI fund revenues for non-UI purposes, as it has done so often in the past.

Prohibition Against UI Tax Diversions - SCR-60 (Sweeney, Kean, T.) would amend the State Constitution to prevent the State from diverting payroll taxes to pay for other budget expenses.  NJBIA believes this legislation is long overdue.  It will help both employers and their employees by maintaining the solvency of the Unemployment Insurance (UI) Trust Fund, Temporary Disability Insurance (TDI) Benefit Fund, and various workers’ compensation funds.

SCR-60 would constitutionally prohibit the State from imposing payroll taxes on employers and their employees except to provide an employee benefit.  This measure would require voter ratification.  Since 1993, nearly $5 billion in payroll tax revenues have been diverted from the UI Fund to help balance the State budget, leaving the Fund balance at a 20-year low.  While siphoning money from the UI fund, the State actually increased benefit levels.  For example, in 2005, the State enacted a supplemental UI benefit that will be triggered if the unemployment rate rises above 6 percent. 

Access to Employee’s Personal Information by Labor Unions - A-2074 (Watson Coleman), would require contractors who are subject to the State’s Prevailing Wage Act to disclose wage records to public entities.  These entities would be required, in turn, to disclose these records to any organized labor representative who requests them.  As amended, the legislation would make an employee’s home address available to organized labor.  NJBIA opposes this bill. 

Mandatory Rest Breaks - A-2629 (Vas) would require every employer to provide a 15-minute, paid rest break for employees who work for any continuous period of more than four hours.  It would also require them to provide a meal break of at least 30 minutes for employees who work more than six hours continuously. 

NJBIA opposes this bill.  In seeking to micromanage every workplace in the State in an identical manner, it would be extremely disruptive to both public and private workplaces.  The bill applies to both hourly and salaried employees and would impact every profession, even those that provide lifesaving services.  Only workers whose rest or meal breaks are covered under a collective bargaining agreement would be exempted.

A-2629 could make it more difficult for employers to arrange for flexible work schedules so employees can attend doctors’ appointments or meet childcare needs.  For example, employees who ask to work through lunch so they can leave early to pick up their child might find that their requests are denied due to the bill’s rigid requirements.  Employers and employees alike need the flexibility to make arrangements that make sense for their particular workplace or situation.  Treating every single workplace in an identical fashion is both impractical and unworkable.

Q. What is New Jersey’s paid family leave law and where can I find information about this new mandate?

A.  New Jersey’s new Paid Family Leave Act will make the State’s already confusing disability and leave laws the most complicated in the nation.  The new law was signed by Governor Corzine on May 2, 2008, and will take effect on January 1, 2009. 

The NJ Department of Labor & Workforce Development this fall is expected to propose regulations that will include information about the forms and processes that employers will be required to use.  Savvy employers can begin to prepare for these new changes today by becoming familiar with the law and its likely impact on their workplace.

Paid family leave, which applies to all New Jersey employers, regardless of size, provides eligible employees with up to six weeks of benefit payments annually to care for certain family members.  The benefit payments are funded by a new payroll tax on employees.  (This is in addition to the short-term disability tax that most employees currently pay.)  The law, as currently written, does not require employers to contribute to the paid leave fund. 

Please note the following dates:
•           The new employee tax will go into effect on January 1, 2009.
•           Eligible employees will be able to take paid leave starting July 1, 2009.

Eligible employees will be able to take up to six weeks off each year.  They will receive a paid-leave benefit equal to two-thirds of their salary, up to a maximum of $524 per week.  This amount is expected to increase on January 1, 2009.

Employees may take the leave to:
1)         bond with a newborn or adopted child or
2)         care for the serious health condition of a family member. 

A period of paid family leave may not be used for an employee’s own "serious health condition."  The law also allows an employer to require an employee to use up to two weeks of any paid sick, vacation or other paid time off in connection with a period of paid family leave.  This would reduce the leave benefit received under the new law to four weeks.

Additionally, while the benefit payments authorized by the new law do not guarantee job protection for employees at firms with 2-49 employees, employers must carefully evaluate any request to take paid family leave.  Any employer, regardless of size, may be obligated to hold an employee’s job under a variety of other statutes including, but not limited to, the Americans with Disability Act and the New Jersey Law Against Discrimination.

Additionally, large employers (those with 50 or more employees) must evaluate any paid family leave request in conjunction with the federal Family and Medical Leave Act and the New Jersey Family Leave Act, both of which provide for unpaid leave.  These laws may ultimately provide job protection to employees taking paid family leave under the new law.

As a service to its members, NJBIA has created a new Web page, www.njbia.org/paidleave, where you can access detailed information on the new law, its history, and how it will impact your operations.  You are also encouraged to attend one of two identical seminars, which will be held October 24 in Eatontown and October 29 in Monroe Township.  Visit www.njbia.org/events to register online.  You may also at 609-393-7707, ext. 209.

New Jersey Employment Growth Falters with Loss of 14,500
Private-Sector Jobs in First Seven Months of 2008
New Jersey sustained a loss of 4,300 private-sector jobs in June and July, bringing the State’s total private-sector loss to 14,500 jobs in the first seven months of the year, according to preliminary data issued by the NJ Department of Labor & Workforce Development.

The loss of jobs (-4,200 in June and -100 in July) marks an end to the State’s nearly five-year employment expansion, which was one of the weakest on record. 

"It's no longer a question of whether New Jersey is entering a downturn. We’re there," said NJBIA President Philip Kirschner.  "Any hope of a comeback this year in private-sector job growth has vanished."

Total private-sector employment in New Jersey now stands at 3,419,300, 14,500 less than it was in December 2007.

Every major sector of the State economy, except government, lost ground in the first seven months of 2008.  Manufacturing lost 7,800 jobs, a decline of 2.5 percent.  Construction lost 3,500 jobs, a decline of 2.1 percent, and the service sector lost 3,300 jobs, a decline of 0.1 percent.  In the public sector (government), 400 jobs were added.

In the meantime, the State’s unemployment rate has risen steadily, from a low of 4.2 percent in the last half of 2007 to 5.4 percent in July. 

Regional economists point to the loss of 14,500 jobs in the first half as evidence that New Jersey is in a recession.  The current employment contraction also follows one of the weakest periods of employment growth in more than half a century.

The recently ended employment expansion, which lasted for nearly five years, began in March 2003 and ended in December 2007.  An average of 15,300 private-sector jobs was added in each of those five years.  This is much less than the average of 66,600 jobs added annually in the 1993-2000 expansion.

Employment growth has been so slow in recent years that there are now 10,700 fewer private-sector jobs in New Jersey than there were in December 2000, over seven years ago!

New Jersey has also lagged the nation in its rate of employment growth.  A Rutgers University analysis (Reversal of Economic Fortune, April 2008, Hughes and Seneca) finds that New Jersey was 41st in its rate of job creation over the past two years.  (The nation as a whole added 2.74 million private-sector jobs in 2006 and 2007, for a gain of 2.4 percent.  New Jersey added 31,000 jobs over the same period, a gain of 0.9 percent.)

Although the last seven years (December 2000-December 2007) were marked by anemic job growth in the private sector, growth in government jobs was exceptional.  With a gain of 54,800 jobs, the public sector contributed 93 percent of the 58,600 jobs created Statewide in this period (which included a brief recession), while the private sector contributed only 3,800 of those jobs.