Despite tremendous business opposition, Governor Jon Corzine on May 2 made good on his pledge to sign legislation making New Jersey only the third state in the nation to provide all employees with up to six weeks of paid family leave. Employees can receive two-thirds of their pay, up to a maximum of $524 per week. To pay for the program, the new law on January 1 will increase payroll taxes on all workers. Employees will not be able to begin taking paid leave until July 1, 2009.

The law permits employers to require employees who take paid leave to use up to two weeks of vacation, sick or other paid time off provided by the employer instead of paid leave. The employees would then be able to take only an additional four weeks of paid leave under the new law. The law also states that employers with 2-49 workers would incur no legal liability for not holding open a position for an employee who takes a leave under the program.

"We are astonished that the Governor and the Legislature would impose a paid leave mandate on businesses that are already struggling to survive a recession," NJBIA President Philip Kirschner said. NJBIA and its members vigorously opposed this measure every step of the way, as we have done for the past 12 years. It will impose a burden on employers during an economic downturn when job losses are mounting. It will cement New Jersey’s reputation as a poor place in which to operate a business.

NJBIA has a fact sheet available to its members explaining how the new law works and how it will impact their operations. The fact sheet can be accessed at www.njbia.org/paidleave. For more information, contact John Rogers at ext. 209.

NJBIA Survey: Health Insurance Costs Double in Six Years

Employer health insurance costs rose by an average of 9.4 percent to $7,139 per employee in 2007, according to the results of NJBIA’s latest Health Benefits Survey. The cost increases in 2007 are part of an extended period of high health-insurance inflation that has seen costs double for employers over the past six years. The full report on the survey findings will appear in the June edition of New Jersey Business magazine.

The survey shows that rising health insurance costs have hit small companies the hardest, with the average cost of an insurance policy for those with two to 50 employees rising by an average of 9.8 percent to $7,251 per employee in 2007. The average cost of an insurance policy for companies with 51 or more employees rose by an average of 7.7 percent to $6,598 per employee.

In spite of soaring costs, 98 percent of companies with 51 or more employees said they still provide health insurance coverage. But a growing number of smaller companies said they have dropped coverage because they can no longer afford it. Seventy-five percent of companies with 2-19 employees reported providing coverage, down from 92 percent four years ago.

"The average cost has doubled over the past six years," said NJBIA Senior Vice President Melanie Willoughby. "It's reached the point where a lot of small companies simply can’t afford it anymore."

Healthcare Decision Makers Pledge Healthcare Reform

The chairman of the Senate Health Committee, Senator Joseph Vitale, believes universal healthcare is coming to New Jersey, but he said it won't look like the single-payer (government-sponsored) systems in Great Britain or Canada. Senator Vitale made his comments on April 22 as part of NJBIA’s Meet the Decision Makers series. He was joined by NJ Health Department Commissioner Heather Howard and Assembly Budget Committee Chairman Louis Greenwald to discuss healthcare reform.

Vitale has unveiled a comprehensive reform plan that would expand New Jersey’s existing subsidized insurance program for children, FamilyCare, and require all parents to obtain health insurance for their children. He also envisions extending the requirement to adults in the future, also with a mechanism to subsidize premiums for those who cannot afford them.

He said the plan should provide for something close to universal health insurance coverage in New Jersey, but it would not be a government-sponsored program. "I can't worry about what a single-payer system looks like in Canada or Great Britain or anywhere else," Vitale said. "I'm working on New Jersey."

Paying for such reforms would be difficult, but Howard pointed out that the current system is costly to the State as well, because it winds up paying hundreds of millions of dollars for hospital charity care to provide medical services to the uninsured. "Can we afford not to do this?" Howard asked. "We spend a lot of money on healthcare (after someone becomes ill). Wouldn’t we be better off spending our money upfront on insurance?"

Greenwald drew an analogy to the successful auto insurance reform effort of a few years ago, saying that both need to solve the same problems, such as overregulation and lack of competition. He said there needs to be more flexibility in the types of coverage available.

Rutgers Report: NJ Ranks 41st in the Nation in Private-Sector Job Creation, Lags Behind New York and Pennsylvania

In another sign that New Jersey’s high costs are driving employers away, New Jersey ranked 41st in private-sector job creation in each of the past two years, two Rutgers University economists said in a report released April 21. New Jersey also ranked well behind New York and Pennsylvania in job creation. New Jersey, which used to be an employment-growth leader in the mid-Atlantic region, has fallen behind its closest competitors, say professors James W. Hughes and Joseph J. Seneca in their report, Reversal of Economic Fortune, Regional and State Prosperity at Risk.

NJBIA’s Directory of the 213th New Jersey Legislature

NJBIA's handy, pocket-sized Directory of the 213th NJ Legislature is now available. It is the best resource in the State for contacting State and federal decision-makers and their staff. The directory contains legislators' photos and the towns they represent, committee assignments, district office addresses, phone and fax numbers, e-mail addresses, and the names of their legislative aides. It also lists the members of the Governor's Cabinet, Senate and Assembly leaders and staff. The cost is just $4 per copy ($3 per copy if purchasing more than 100 copies) for NJBIA members and $7 per copy for nonmembers. For more information, contact Lynette Mujica at 609-393-7707, ext. 224. You can also order your copies online now.

Learn to Save on Your Business Costs, May 21

Michael Santoli, author of Barron's "Streetwise" column and one of the brightest analysts in business journalism today, will tell us what to expect from the current economic downturn, at the  NJBIA-Fidelity Investments Economic Forum: Surviving the Slowdown - Managing Costs in Tough Times,  May 21 at the Sheraton Hotel in Eatontown. How long will the downturn be? How will NJ be impacted? When will the market turmoil end? You will also hear from three of NJ's top business executives, who will present practical cost-saving tips for surviving the slowdown. Register online now, or contact Stacy Wichner at ext. 213 for more information.

Meet NJ's Top Government Leaders at 2 Special Briefings

NJBIA will bring together top Administration officials, along with legislative leaders, for insightful briefings at the Forsgate Country Club in Monroe Township on two of the biggest issues impacting your business operations, Energy - May 16, and Environmental Regulation and Legislation - October 17.