NJBIA Fights Aggressive Labor Agenda: Threats Include Union Monopolies, Paid Leave
This spring New Jersey employers face the daunting challenge of a sluggish economy and the prospect of a $1 billion hike in corporate taxes. But the bad news does not end there. Some legislators are responding to pressure from organized labor to move forward with an aggressive agenda of labor bills that could drive employer costs even higher.

By the time the Legislature recesses for the summer on June 27, critical votes may be cast on antibusiness initiatives including paid family leave mandates, costly union-only contracts for public construction projects, and crippling changes to the state's model workers' compensation program.

Union-Only Contracts-Legislation enabling union-only contracts, otherwise known as project labor agreements (PLAs), may be pushed in May. The bill, A-1926 (Egan, Malone)/ S-1044 (Sweeney, Cafiero), would effectively limit state, county and local construction contracts to firms using union labor only. Fully qualified nonunion contractors could be denied contracts, driving up the cost of public construction statewide.

PLAs undermine the competitive bidding process that has helped New Jersey complete highways, schools, and municipal facilities at the best price for the taxpayer. In fact, if A-1926/S-1044 becomes law, it will prevent the NJ Supreme Court from doing what it did twice in the 1990s: strike down PLA proposals and issue a ringing endorsement of the state's open bidding laws.

NJBIA urges its members to contact the Senate Labor Committee and strongly oppose this legislation. Tell them:

• Limiting the number of bidders will raise the cost of public construction contracts
• PLAs seek to overturn the clear-cut decisions of the New Jersey Supreme Court. They seek to permanently alter the state's competitive bidding laws.
• PLAs discriminate against qualified contractors, especially small ones. An overwhelming number of New Jersey's small, women- and minority-owned contractors are nonunion companies that will be denied work under A-1926/S-1044.

Paid Family Leave-Another issue that may resurface is a proposed paid family leave mandate.

A-1892 (Friscia)/S-1065 (Coniglio) seeks to make New Jersey the only state in the nation with paid time off for family and medical leave.

This bill would require even the smallest employers to provide employees with eight weeks of leave for the care of a newborn and four weeks for the care of a sick family member. The leave benefits would be paid from the state Temporary Disability Insurance (TDI) fund. Under this proposal, the payments would be made to people who are NOT temporarily disabled, and they would be paid in addition to any weeks of TDI an employee collected recently for their own disability.

A mandate this sweeping will cost hundreds of millions of dollars each year. Even the sponsors of A-1892 and S-1065 recognize that the current TDI fund does not have the money to pay for these new benefits. In fact, existing TDI payroll taxes barely generate enough revenue to cover present benefit payouts.

The legislation therefore imposes two new taxes: one on employer payroll contributions to the TDI fund and a second on employee payroll contributions. Contributions to the Unemployment Insurance (UI) Fund are reduced by an equal amount, leaving employers liable for an across-the-board UI payroll tax to make up for the missing millions.

Paid leave will disrupt New Jersey employers of all sizes, but will devastate small businesses with less than 50 employees that are exempt from the state and federal unpaid leave laws. This bill is a job-killer that will put New Jersey out of step with employment policies nationwide.

NJBIA members should express opposition to A-1892/S-1065 to members of the Assembly and Senate Labor Committees.

The two labor committees may also consider another paid leave mandate, this time for "special needs" students. A-831 (Cona-way, Doria) / S-126 (Bennett, Cafiero) would require employers of 50 or more to provide 24 hours of paid leave to parents with "special needs" children in public schools. This leave is in addition to the months of unpaid state and federal leave these companies must provide or any other leave offered through employer policies or collective bargaining, including sick leave, vacation, and paid holidays.

The leave time, which can be taken in any increment of time within the 24-hour limit, can be used to attend any school conference, meeting or other function requested by a teacher or other staff for a special needs child. However, the parents are free to make an informal determination that their child under 18 has special needs without waiting for a teacher or school counselor to agree. An Individualized Education Plan is not required. A disability determination by a child study team is not required. No medical certification is required.

Under the bill, special needs encompass a vague range of "behavior problems,""social problems" and "lateness." In other words, the term can be applied to virtually all teenagers.

Both parents can take the leave, even if both work for the same company. It would be an absolute entitlement. Any employer who interferes with a request for special needs leave may be fined $2,000 for the first offense and $5,000 for each subsequent incident. The employer may also be charged punitive damages of up to $500,000 or 1% of the worth of their business in a class action lawsuit.

Workers' Compensation-Legislation has also been proposed that would cripple New Jersey's much-admired workers' compensation system!

Our successful program for treating employees with job-related injuries is the envy of many states experiencing double-digit increases in insurance premiums. By controlling healthcare costs, New Jersey's system has kept employer premiums under control while providing annual increases in disability benefits to injured workers.

The key to New Jersey's success has been its requirement that employers choose the treating physician in workers' compensation cases. This helps assure that physicians will have the necessary experience in industrial injuries to treat the employee effectively and return them to work at the proper point. The worker gets quality care, but is not kept out of work for weeks or months longer than necessary.

S-1075 (Kavanaugh, Littell)/A-575 ( Impreveduto, DiGaetano) would change all that. It strips employers of the right to choose the treating physician. This is an invitation to workers' compensation fraud and abuse as employees are free to "shop" for physicians who will grant extended leave approvals.

Speak Up!

Legislative Briefs on these bills are available by calling the NJBIA government affairs department at 609-393-7707, ext. 223. For help in contacting your legislators on these issues, Go Here.

Mock Trial: NJBIA Employers Learn How to Handle Harassment Lawsuits in a Court of Law
On April 17, human resource managers from NJBIA member firms found themselves in a jury box at the Rutgers School of Law. They gathered in an elaborately staged courtroom to experience firsthand what can happen when an employer is charged in a sexual harassment lawsuit.

Martha L. Lester, chair of the Employment Law Practice at the Roseland firm of Lowenstein Sandler, presided over the live courtroom drama. She was joined by a half dozen colleagues realistically portraying the judge, plaintiff, corporate executives, and lawyers.

Six jurors were selected from the audience to sit in judgement of the complicated fictional case of Torrez v. Stevenson Corporation. As the mock trial progressed, it was hard to know whether the plaintiff or defendant had the upper hand. Was Michele Torrez a victim of sexual harassment and racial discrimination when she was passed over for a key promotion? Were her supervisors' comments misinterpreted? Were the alleged incidents severe and pervasive enough to offend a reasonable woman?

The issues raised in the abbreviated trial led the jury to engage in prolonged, lively deliberations reminiscent of "Twelve Angry Men." When they rejoined the audience to announce a partial verdict, they ruled that the employer had upheld its harassment procedures sufficiently to escape liability. The clear lesson: responding promptly and seriously to every harassment complaint can spare a company costly legal damages and a loss of reputation.

NJBIA, County Colleges Partner to Promote Customized Training
Since 1992, hundreds of employers have received state grants enabling their workers to keep pace with changes in technology and skills. NJBIA is now working with the state's 19 community colleges to bring customized training to employers statewide including assistance in preparing the grant applications. Training is available in areas ranging from manufacturing skills to literacy education to ISO 9000 training. To determine if your company is eligible for customized training grants, call the Network for Occupational Training and Education at 800-821-NOTE or visit www.njtraining.org.

May 29 Seminar: Making Sense of Family & Medical Leave
Few laws have been as confusing for employers of 50 or more as the Federal Family and Medical Leave Act (FMLA) and the New Jersey Family Leave Act (FLA). Taken together, their overlapping requirements are enough to drive managers out of their minds. Now, with the threat of a paid leave law on the horizon, it is more important than ever for businesses to understand their legal obligations.

On Wednesday, May 29, NJBIA will provide an in-depth legal briefing on Family & Medical Leave requirements at the Sheraton at Woodbridge Place in Iselin. Business owners, human resource managers and other staff involved in handling leave requests are encouraged to come and learn what the law's ever-changing rules and definitions mean for your company. Employment attorneys Angelo Genova of Genova, Burns & Vernoia and Vince Avallone of McCarter & English, LLP will explore the many issues relating to leave requests. Cost to attend is $99 per person for members and $129 for nonmembers. To register, call Lisa Figatner at 609-393-7707, ext. 239. Space is limited. Don't delay!

NEW JERSEY EMPLOYMENT WATCH
First Quarter Job Losses Delay NJ's 2002 Economic Recovery
Earlier predictions that New Jersey would rise from the muck of this recession in the first quarter must now be assigned to the dustbin of failed economic forecasts.

The state's private sector suffered a net loss of 11,800 jobs in the first quarter, wiping out a slim gain of 8,000 private-sector jobs in the previous quarter. Economists had hoped that gain would mark the end of New Jersey's shallow 2001 recession.

The first quarter employment loss was spread evenly across the state economy. Manufacturers shed 7,800 jobs-on top of a loss of more than 26,000 jobs last year. (See chart below) The construction industry sustained a marginal loss of 100 jobs; and service-sector employment fell by 3,900 jobs.

Forecasters are now questioning their earlier optimism and hedging their bets. Rutgers University economists Jim Hughes and Joe Seneca, two of the state's most respected and savvy prognosticators, declared in April that this downturn "ain't over" yet. They said the first quarter employment loss raises "the specter of a double-dip recession."

Since hitting a peak of more than 3.43 million jobs in June 2001, employment in New Jersey's private sector had fallen by 26,200 jobs as of the end of March. (See chart below)

New Jersey's total employment (including government employment) of 4.01 million jobs at the end of March had reached its lowest point since September 2001, falling 18,100 jobs short of the historic peak reached in June 2001.

Meanwhile, New Jersey's unemployment rate has continued to rise, climbing to a five-year high of 5.6% in March, up more than two percentage points from a ten-year low of 3.5% 13 months ago. Perhaps more importantly, the gap between New Jersey's unemployment rate and the nation's narrowed from a full percentage point in December to just one tenth of a percentage point in March.

While New Jersey's downturn has been mild by historical standards (more than a quarter of a million jobs were lost in our painfully long 1989-92 recession), the nascent recovery remains anemic and in danger of collapsing.

Even the national recovery may be more fragile than some data indicates. Corporate profits plunged 16 percent last year, the harshest decline since World War II. Among the nation's largest 500 corporations, profits fell by a whopping 50 percent, according to the US Commerce Department. First quarter profits remained weak. To bring expenses in line with revenues, corporations laid off one million workers last year and slashed spending.