To Arms:
What Employers Should Know About Military Leave
By the time this newsletter reaches you, the United States may be engaged in military action in Iraq. The threat of war and the ongoing war on terrorism make it especially important for New Jersey employers to know their legal obligations to employees who are called to military service overseas or National Guard duty closer to home.

Since September 2001, New Jersey employees serving in the National Guard have been called up to guard airports, power plants and other important facilities throughout the state. Now reserve units are being activated to prepare for military action in Iraq and other locations around the world. NJBIA is taking this opportunity to inform members of their legal obligations to provide military leave to eligible employees.

The law in brief
Employees seeking military leave enjoy job protection under both state and national laws. In New Jersey, they are covered by the Soldiers' and Sailors' Civil Relief Act of 1979. The Act requires employers to reemploy any worker returning from leave if the employee 1) reports back within 90 days of being relieved from service, 2) provides the employer with a certificate documenting the completion of military service, and 3) is still qualified to perform his or her job. Employers who fail to comply with the Relief Act may be subject to complaints under the New Jersey Law Against Discrimination. New Jersey employers of all sizes must comply with the federal Uniform Services Employment & Reemployment Rights Act (USERRA) of 1994 as well. This law protects both employees and job applicants who may be called to serve in the armed forces, the Army and Air National Guard or the Public Health Service corps. In wartime or in emergency situations, the president also may designate other groups as eligible for USERRA protection. Under USERRA, employers must be able to show that any adverse employment action against an employee is not related to their service (or potential service) in the military. For example, it is a violation to refuse to hire a qualified applicant simply because he or she may be called up in the future.

Protection of benefits
Companies do not have to pay an employee while on military leave. However, employers that offer health insurance must make continued coverage available at the employee's expense. This "COBRA" approach to maintaining health benefits applies to companies of all sizes, even those below the standard COBRA threshold of 20 employees. Similarly, USERRA permits employees to continue making contributions to ERISA-covered pension plans as if there had been no break in employment. Furthermore, employers must maintain an employee's rights and benefits tied to seniority and award them as if the employee had never left. Benefits, rights and privileges that are unrelated to an employee's seniority should resume as soon as the individual returns from service. In order to qualify for reemployment, the employee must give their employer advance notice of military leave (if possible) and be honorably discharged from service. Returning employees cannot be terminated without good cause for six months after they return, if their service lasted 31 to 180 days. Employees who served more than 180 days cannot be terminated without good cause for one year after their return to work. Reemployment rights end after cumulative military leave exceeds five years; but there are numerous exceptions for training and emergency service, so employers should not assume that any employee has ceased to enjoy USERRA's protection. Even so, the law acknowledges circumstances where it is not possible to hold a job.

Support our armed forces
More than half of America's armed forces are drawn from the ranks of the National Guard and Reserves. If employers fail to support workers called to military service, America's system of volunteer armed forces cannot succeed. Some managers may think the current rules for military leave are inconvenient. Yet consider the "inconvenience" of having your family members drafted into service on an involuntary basis. No one wants to see a return to that system, least of all military officers who prefer to work with willing volunteers. So NJBIA asks all its members to support employees called into military service. After all, they are defending your company's ability to operate freely.

Military Leave Information Resources
The national and state committees of Employer Support of the Guard and Reserves (ESGR) are an outstanding resource for employers trying to understand their obligations regarding military leave. Start with the national Web site: www.esgr.org. It provides a detailed description of the USERRA, along with helpful information for business managers. There is also an Ombudsman Service that can offer informal mediation for employers and employees who disagree over military leave policy. The toll-free number for this and other ESGR assistance services is 800-336-4590.

The New Jersey Committee of ESGR (www.state.nj.us/military/njesgr/) works closely with employers to help businesses comply with the laws regarding military leave. Employers can contact Jane Davis by e-mail at jane.davis@njdmava.state.nj.us, by fax (609-530-7193) or by phone (609-530-6910). NJBIA's Practical Guide to New Jersey Employment Law, edited by Martha Lester, Esq. of the law firm Lowenstein Sandler, also features a chapter on military leave.

Assembly Panel Decides Not To Release Discrimination Bill
Sweeping legislation making it easier to sue New Jersey employers for discrimination was considered but not released by the Assembly Judiciary Committee on January 16. The bill, A-1782 (Weinberg, Ahearn), would make it easier for employees to sue under the New Jersey Law Against Discrimination (NJLAD) and could result in an explosion of lawsuits. Committee members from both parties voiced concern that the bill would be unworkable.

Under the bill, virtually every decision to fire, promote or offer early retirement benefits to employees could become a costly lawsuit. Common, legitimate business practices, such as offering retirement incentives or eliminating certain jobs for economic reasons, could be considered discriminatory if they affect a "disproportionate" number of people of some age. Since every employee is of some age, virtually every employer decision could be the subject of a lawsuit, with employers being held liable for damages that could reach hundreds of thousands of dollars for each case. This "disparate impact" approach will not work in New Jersey because our Law Against Discrimination permits age discrimination lawsuits by anyone age 18 or older. National age discrimination laws, in contrast, are limited to individuals age 40 or older. If enacted, A-1782 would create a bizarre situation where routine business policies are suddenly "discriminatory." The measure also would require employers to provide to any employee considering an early retirement offer the job titles, ages, sex and race of every employee in the company. This imposes a paperwork burden, whose sole purpose is to generate the statistical analysis and other evidence that attorneys can use to initiate a lawsuit. This would also invade the privacy of employees and make early retirement programs impractical. The bill would allow terminated or retiring employees to bring discrimination charges even after they signed a valid waiver saying they would not sue in return for financial compensation. Employees would be free to accept severance pay or a voluntary retirement package and still claim "discrimination" by their former employer. Employers would stop offering such benefits since they could get sued anyway. For more information, contact Jeff Stoller at ext. 209 or jstoller@njbia.org.

Export Promotion Programs can Help Businesses Expand into Lucrative Overseas Markets
The Global Business Initiative (GBI)-a partnership between NJBIA, the College of New Jersey, and state government-is continuing its 2003 series of briefings for employers interested in expanding into foreign markets. New Jersey now ranks eighth among the states in terms of exports.

More than 45 executives and government officials participated in GBI's January briefing on trade opportunities in Hong Kong-a leading gateway to the Chinese mainland where a wide variety of industries are undergoing dramatic growth. The vitality of the Chinese market stands in marked contrast to sluggish economic conditions elsewhere in the world. On March 18, GBI will examine trade opportunities with Mexico and Canada, the nations that entered into the North America Free Trade Agreement (NAFTA) with the US a decade ago. NAFTA reduced tariff barriers between the three countries and led to a significant increase in trade activity. Canada and Mexico are two of New Jersey's largest trade partners and are among the most accessible markets for first-time exporters to approach. The GBI program will cover the impact of NAFTA in its initial years and identify the most promising business opportunities for New Jersey-based companies. On April 9, the series examines the biggest obstacle to export success: "Cross-Cultural Differences." Many employers with high quality products and great technical knowledge have seen promising business deals go sour due to mistakes in their approach to foreign business partners. This GBI briefing will explore the common errors American exporters make in working with people overseas. It will also highlight cultural differences within a foreign nation, which also can undermine successful business negotiations. The April 22 presentation will describe emerging trade opportunities with the countries of the European Union (EU). Speakers will discuss the move to a single currency, the euro, and explain how New Jersey companies can take advantage of the creation of this huge unified market. GBI will also highlight new EU requirements for products. The Initiative is in the process of purchasing a $15,000 software package to deal with these requirements, which will be shared with interested New Jersey exporters. The sessions will conclude on May 20 with a program on emerging trade opportunities in Eastern Europe. For more information on any of these presentations, contact Keld Hansen, Director, The NJ Global Business Initiative, The College of New Jersey, P.O. Box 7718, Ewing, NJ 08628-0718, 609-771-2033 (e-mail: khansen@tcnj.edu). NJBIA member companies offer a diverse array of products and services, many of which could be expanded into foreign markets. We believe the NJ Global Business Initiative can give our state's private sector valuable assistance in taking advantage of new trade opportunities. Now is the time for employers to "think globally." With many domestic markets still struggling to grow, it pays to discover which countries have businesses looking for new suppliers. A good place to start your search is on the Internet. International trade Web sites are sponsored by the US government (www.export.gov and www.commerce.gov) as well as the State of New Jersey (www.state.nj.us/commerce/). There is also a special section devoted to international trade in the Links section Go Here.

NJBIA Joins Global Business Initiative to Promote NJ Exports
The work of the Global Business Initiative should be advanced by a new partnership agreement between the US Commerce Department and NJ Commerce and Economic Growth Commission. Under that agreement, the US Commerce's Commercial Service and the state Commerce Commission's Office of International Trade and Protocol will establish a joint export-services office in downtown Trenton.

The office will provide the state's businesses with export counseling, international contacts, market research, and product and service promotion. A trade mission to Africa is being planned for May, and other trade missions are expected to follow. NJBIA has joined with the College of New Jersey and the state of New Jersey in a partnership that aims to promote New Jersey-made products overseas. After reaching a peak of $28.8 billion in 2000, New Jersey exports dropped to $26 billion in the fiscal year ending June 30, 2002.

NEW JERSEY EMPLOYMENT WATCH
2002-2003 Review & Forecast
Economy Stuck in 'Twilight' of Uncertainty

Commenting on the choppy and uneven performance of the economy over the last year, Business Week recently observed that the nation appears to be "stuck in a twilight zone between full-fledged recovery and outright recession." Symbolic of the up-and-down nature of the economy was the disappointing job loss New Jersey suffered in the month of December. The disappearance of 3,100 private-sector jobs in that month erased about half of the net increase of 6,100 jobs created in October and November. On this cheerless note, New Jersey ended its second consecutive year of employment declines. Private sector employment fell by a net 18,100 jobs in 2002, pulled down by eight months in which employment declined and only four in which it rose. In the 18 months since the state's employment recession began in July 2001, New Jersey has lost a total of 32,500 private sector (i.e. nongovernment) jobs. The state ended 2002 with slightly more than 3.4 million private-sector jobs, a level just above the recession low set in June of last year. Manufacturing has suffered most in New Jersey, with all but a fraction of the 32,500 jobs shed over the last 18 months coming from this sector. Every kind of manufacturing industry, from pharmaceuticals and machinery to publishing and telecommunications, has seen declines. As of December, Garden State manufacturers employed 419,100 people, down from 451,500 in June 2001 at the start of the recession. This employment hemorrhage extends a long-term decline that since 1979 has nearly halved the state's manufacturing payrolls. The construction trades and service industries-the two other major sectors of the state's private-sector economy-have fared better than the goods producers, but even in these sectors employment has remained essentially flat. The state's construction companies concluded 2002 with 162,900 people on their payrolls, adding 1,900 jobs since the start of the recession. The state's service-related industries ended the year with employment of 2,816,000 for an 18-month loss of 2,000 jobs. One of the few clear winners last year was the health services industry, which added 5,700 jobs for a gain of 1.6 percent. While New Jersey's recession has been painful, it has nonetheless been shallow. The state's loss of 32,500 jobs is small compared to the nearly 300,000 jobs lost in the state's 1989-92 recession. And the state's December unemployment rate of 5.5% is far below the peak of 9% seen at the end of the last recession. Our jobless rate also has been lower than the national rate for the last three years. Looking ahead, the New Jersey economy is expected to settle into a slow-growth pattern that will create only half as many new jobs as the prosperous 1990s. In its mid-December forecast, the Rutgers Economic Advisory Service (R/ECON) said it expects employment in New Jersey starting this year to expand by an average of approximately 40,000 new jobs a year through 2007, an annual growth rate of about 1 percent. Most regional economists agree that New Jersey is already on the path to a solid economic recovery. The fourth quarter of 2002 produced a small but encouraging gain in employment, and initial unemployment claims have stabilized below their May 2002 peak. Read the Employment Watch column in the News Center for more details.