On July 26, 2006, Governor Corzine signed into law the Worker Freedom from Intimidation Act.  This law prohibits an employer from requiring their employees to attend any meeting in which the purpose of the meeting is to communicate the employer’s opinion about “religious or political matters.”  In addition, the law prohibits an employer from requiring employees to participate in any communications with the employer concerning the employer’s view of “religious or political matters.”  

The law defines a “political matter” as “political party affiliation and decisions to join or not join or participate in any lawful political, social or community activity.”  Thus, the law’s broad definition could very easily include employer-sponsored charitable activities, such as a United Way campaign. 

Unfortunately, the law does not define the term “communication” as used in the statute, which presented several questions for employers.  For example, it was unclear if company-wide e-mails, posters displayed in break rooms or notices included with employee paychecks were sufficient to constitute a communication and trigger the requirements of the law.  The law does contain an important exemption that allows employers to host meetings and send communications to employees about “religious or political matters” provided the employer notifies employees of their right to refuse to attend the meeting or disregard the communication. 

While this exemption was welcomed, NJBIA was still concerned that some employers could inadvertently run afoul of the new law.  Thankfully, Governor Corzine issued a signing statement, which explains his interpretation of the types of “communications” covered by the law.  This provides limited guidance for employers looking to comply with the spirit of the law.  The statement says the language of the law does not prohibit “the mere sending of an e-mail by an employer, which employees are free to delete or disregard.”  It further notes that “communications” “…is intended to cover interactive communications such as video-conferences and teleconferences, and not simple e-mails.” 

What penalties might an employer face for violating the law?  The law provides that an aggrieved employee must file a civil action within 90 days of the date of any alleged violation.  Employees who prevail in court are eligible to receive payment of any lost wages or benefits, restraints against further violations, reinstatement to a former or equivalent position within the company, and payment of attorney’s fees.  Employers who violate the law may face either triple damages or a civil fine of up to $1,000 for a first violation and up to $5,000 for each subsequent violation.  The law also prohibits retaliation by employers. An employer may not terminate, discipline or penalize an employee because the employee makes a good faith report of a violation or suspected violation of the statute.

The original purpose of this act was to prohibit employers from communicating with their employees during union drives.  As originally conceived, the bill would have included labor organizations within the definition of religious or political matters.  NJBIA successfully argued to have these provisions removed from the legislation since the right to communicate with your employees about labor matters is expressly protected by the National Labor Relations Act.  Employers should consider instituting company-wide policies regarding meetings and e-mails in order to demonstrate their commitment to compliance.  For example, employers may wish to explore including disclaimers in e-mails and materials regarding charitable fundraising that remind employees that they need not participate in these activities.  Alterations to an employee handbook or manual may also serve as a useful reminder to managers and employees of the laws requirements.  

For more information, contact John Rogers at ext. 209.  You can access the Governor’s entire signing statement by visiting www.njbia.org/bills/072706a.pdf.

On October 1, 2006, the New Jersey minimum wage will increase from $6.15 to $7.15 per hour.  Employers should prepare for this increase accordingly.  Additionally, the law requires a State committee to recommend if further increases are warranted in 2007 or beyond. 

Other Workplace Issues to Watch
NJBIA continually monitors legislation that will impact your business.  Below are some of the bills opposed by NJBIA that could significantly add to the cost of running your workplace. 

Mandatory Rest and Meal Breaks
S-1021 (Sweeney) 
This bill would require every business to provide a paid 15-minute rest break every four hours and an unpaid 30 minute meal break every six hours. The bill would make it more difficult for employers and employees to organize flexible work schedules to attend doctors’ appointments or meet child care needs.  For example, an employee who requests to work through lunch in order to leave early to pick up a child could have the request denied in light of the bill’s rigid break-time requirements. 

This attempt to micromanage every workplace in the State in an identical manner sends the wrong message to both employers and employees.  Businesses often work with their employees to provide flexible work arrangements and allow for break periods.  However, treating every single workplace in an identical fashion would disrupt the workplace for workers and employers alike.  It would also have a negative impact on the State economy by making it difficult to attract new businesses.

Mandatory Health Insurance For Large Employers
S-477 (Sweeney)
This bill would require employers with 1,000 or more employees to pay $3.30 per hour per employee for health insurance.  Employers who fail to provide this amount would have to pay the difference to the State.  The bill’s definition of employee includes full- and part-time employees, as well as independent contractors.  Thus, many businesses that believe that they fall below the 1,000-employee threshold would find that they are impacted by this legislation.  Mandating levels of health insurance will not solve New Jersey’s health insurance crisis.  The State needs to reform the system to make insurance more affordable for New Jersey businesses.

90-Day Advance Notice for Business Layoffs
S-472 (Sweeney)/A-1044 (Van Drew)
This bill would establish a Statewide layoff/closing procedure for businesses with at least 100 employees.  Specifically, the bill would require businesses to provide 90 days notice prior to the closing of its facility or the layoff of 50 or more employees in any 30-day period.  Federal law only requires 60 days notice.  The notice would be provided to the employee, the NJ Department of Labor and Work Force Development and to local officials. 

Requiring a business that is struggling financially to provide an extra 30 days notice would actually worsen its financial problems.  Suppliers and customers change their business practices if they learn that a business is experiencing financial difficulty.  For instance, suppliers might demand cash payment for all deliveries.

The bill also contains a penalty scheme that would be particularly burdensome for employers.  The bill would require employers who miss even a single day’s notice to pay covered employees one week’s worth of wages for each year of employment.  This could cost an employer many thousands of dollars.  In cases where a business is struggling to remain solvent, such a severe penalty could lead to the loss of even more jobs. 

Mandatory Leave for Certain Crime Victims
S-1194 (Madden, Karcher)/A-434 (Mayer)
This bill would require every business to provide four weeks of leave to victims of domestic violence and their immediate family members.  In some cases, this new leave would be in addition to the 12 weeks which already exists under the New Jersey Family Leave Act or the federal Family and Medical Leave Act, which currently apply to employers with 50 or more employees.  Further, smaller businesses with limited staffs and resources may not be able to provide this additional required leave in addition to existing paid time off. 

NJBIA understands that victims of domestic violence have special needs and encourages employers to do everything within their power to accommodate them.   However, the Association remains concerned that the bill would create a third mandated leave program that would apply to every employer in the State.

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 community colleges’ Consortium for Workforce and Economic Development to bring customized training to NJBIA members statewide. 

The Consortium serves as a “one-stop” contact for New Jersey businesses seeking customized training for their workers.  The Consortium will even write New Jersey Customized Training grant applications for NJBIA members at no cost to them, a value-added benefit for Association members.  To apply for training grants, contact Bob Bowman at the Consortium at 1-800-821-6683.  You may also go online to learn more about the program by visiting www.njtraining.org. 

The consortium is also working with the NJ Department of Labor & Workforce Development to promote skills training in seven specific areas: pharmaceuticals/biotechnology, science/technology, information technology, logistics, energy, finance, and hospitality/tourism.  Applicants must pay for at least 50 percent of training costs.  The first group of applications is due on October 6, 2006.  The second cycle will commence on January 2, 2007, with applications due on January 27.  You can access more information at the Department of Labor & Workforce Development Web site: http://www.state.nj.us/labor/press/2006/0907WorkforceGrowth.htm.  For more information, contact Christopher Emigholz at ext. 201.

Employment in the State’s private sector declined by 2,500 jobs in July, ending a hopeful run of job gains earlier in the year, according to information released by the NJ Department of Labor in its monthly employment report.

The July loss ended five months of modest gains, leaving the State with an overall increase in private-sector employment of 10,900 jobs so far this year, a gain of just three tenths of one percent.  If job growth remains stuck at this low level, 2006 would become one of the weakest non-recession years for employment growth in a quarter century.

New Jersey’s unemployment rate rose to 5.1 percent in July, up from 4.9 percent in June. The unemployment rate has been rising fitfully since hitting an expansion low of 4.2 percent in May 2005.

Virtually all of this year’s private-sector job gains have come in the service industries, which managed a small gain of 900 jobs in July and are up by 16,400 jobs for the first seven months of the year.

One way to gauge how weak private-sector job growth has been in New Jersey is to compare current employment levels to the previous employment peak reached in December 2000, just before the onset of the last recession.

In July, private-sector employment totaled 3,433,000 jobs.  This is a mere 3,000 jobs above the previous peak reached six years and seven months ago.

The current private-sector employment expansion is also producing many fewer jobs than the two expansions that preceded it.  Since it got underway in April 2003, this expansion (40 months old as of July) has produced an average of about 26,000 private-sector jobs a year.  In comparison, the 1990s expansion produced an average of 63,800 private-sector jobs a year and the 1980s expansion, close to 90,000.

Most of the job growth in the current expansion has come in the construction trades and in certain service industries, particularly in education and health, as well as in leisure and hospitality.  Most losses have come in manufacturing and information services. 

Since December 2000, construction employment has grown by 20,000 jobs for a gain of 13.2 percent. Education and health services have added 67,500 jobs for a gain of 13.4 percent, and companies in the leisure and hospitality industries have added 40,900 jobs, an increase of 13.5 percent.

But the professional and business services sub-sector, an important engine of job growth in the 1990s, has lagged. Modest gains over the last three and a half years have failed to offset sharp recession losses, leaving that sector only 500 jobs above its pre-recession peak of 602,300 jobs.

Manufacturing employment has declined steadily throughout the period although losses have moderated over the last two years.  The State’s manufacturers now employ 317,200 people, 104,800 fewer than they employed six and a half years ago.  The information-services sector, which includes computer and telecommunications services, has lost 32,500 jobs since December 2000, one quarter of its pre-recession total of 127,500.

Even as employment growth in the private sector has slowed over the last six and a half years, government employment has soared.  Since December 2000, public-sector employment in New Jersey has expanded by a net 53,200 jobs, a 9 percent increase.

NJ Private-Sector Employment
Net 3,000 Jobs Added in Six and a Half Years
(in thousands of jobs)

                                                                 Pre-Recession Peak
                                                                 Dec-00        July 06          Change        % Differ.

MAJOR SECTORS                                                                                              
Construction                                         151.4             171.4             20.0              13.2%
Manufacturing                                      422.0             317.2            -104.8           -24.8%
Services                                                2,854.7          2,942.5         87.8              3.1%
                                                                                                                             
SERVICES SUBSECTORS                                                                                 
Trade, Transportation & Utilities   908.0           884.4            -23.6             -2.6%
Professional & Business Services  602.3        602.8             0.5                0.1%
Education & Health Services          505.1           572.6            67.5              13.4%
Leisure & Hospitality                          303.6           344.5            40.9              13.5%
Financial Activities                              266.1           283.2            17.1              6.4%
Information                                             127.5           95.0              -32.5             -25.5%
                                                                                                                               
TOTAL PRIVATE SECTOR            3,430.0        3,433.0         3.0                0.1%

Source: NJ Department of Labor, seasonally adjusted nonfarm employment