NJ Business Matters: The Blog of the CIANJ

Paid Leave Mandate To Be Signed Friday

On Friday, Governor Corzine will sign legislation making New Jersey a more expensive place to live, work and do business. The bill (A-873) will make NJ the second state with a paid leave mandate on virtually all businesses. 

From CIANJ's press release,

“Once again, Trenton has chosen to increase the cost of doing business in one of the nation’s most expensive states,” said CIANJ President John Galandak. “Creating this mandate during an economic downturn only exacerbates the negative message sent to companies considering locating to or expanding within New Jersey. Benefits are nice, but a job is essential.”

Remember that last line. In 2007 New Jersey added just 3,700 private-sector jobs, growing only 0.1%. That put the Garden State 41st in the nation. Meanwhile, NJ has already lost 10,000 private-sector jobs in 2008. Adding mandates unique to the state only worsens that trend. Call it subtraction by addition.

Jersey's Job Growth Continues to Slide

In a year in which New Jersey has already lost more than 10,000 private sector jobs, Rutgers University has unveiled a study demonstrating our 2007 growth was slower than neighboring states. In 2007, NJ added only 3,700 private sector jobs, or about 0.1% of its workforce. To compare, here is a rundown of growth figures in nearby states:

• New York - 1.2%
• Connecticut - 0.8%
• Massachusetts - 0.7%
• Pennsylvania - 0.6%
• New Jersey - 0.1%

Overall, New Jersey ranked 35th in job creation as a percentage of its overall workforce. If we want to maintain a high quality of life, those numbers have to change - and fast. A good start would be for Governor Corzine to veto the job-killing paid leave mandate that sits on his desk.

The Record Holds Its Applause on Paid Leave

Kudos to the editorial board at The Record for acknowledging the legitimate questions being asked about New Jersey's proposed paid leave mandate - questions still not adequately answered by NJ legislators.

All two of you regular blog readers know CIANJ's objections to the paid leave bill sitting on Governor Corzine's desk: that it will put NJ's already fragile business climate in further jeopardy, it could leave small businesses exposed to lawsuits and no one really knows what the program will cost. There are no contingencies in the bill if the paid leave fund were to run a shortfall.

As the Record aptly notes,

The state's business climate is not robust. Any bill that may further erode the stability of small businesses across the state gives pause for thought.

We still believe that paid family leave is well intended. But given the current business climate and the unknowns in implementing paid family leave in New Jersey, we are also concerned that paid family leave may do little good if workers find themselves unemployed.

As your trusty blogger wrote to the Star-Ledger on Sunday, business groups have not argued that paid leave is a bad idea...as a benefit offered by companies. However, government should not be mandating how each business in the state manages once-in-a-lifetime events.

Who Cares About New Jersey's Competitiveness

CIANJ thanks the 15 Senators who voted "NO" on making New Jersey the second state with a paid leave mandate on virtually all employers. The full roll call vote is available here.

The Senators who voted NO, despite enormous pressure are:

Senator Kip Bateman (R-16)
Senator Jennifer Beck (R-12)
Senator Anthony Bucco (R-25)
Senator Gerald Cardinale (R-39)
Senator Andrew Ciesla (R-10)
Senator Leonard Connors (R-9)
Senator Nia Gill (D-34)
Senator Phil Haines (R-8)
Senator Tom Kean, Jr. (R-21)
Senator Leonard Lance (R-23)
Senator Steven Oroho (R-24)
Senator Kevin O'Toole (R-40)
Senator Joe Pennacchio (R-26)
Senator Robert Singer (R-30)
Senator Shirley Turner (D-15)

In the previous voting session on the issue, Senators Joe Kyrillos (R-13) and Sean Kean (R-11) voted no. Neither were present today. Senator Ron Rice (D-28) was present, but not voting. In the previous session, Senator Rice said that he supported the spirit of paid leave, but noted his concerns over the impact on small businesses. He cast no vote during that session as well.

The Governor has already hailed Senate passage of the mandate, which is obviously bad news for those of us calling on him to veto it.

"Liberty and Prosperity" - Update: Paid Leave Mandate Passes

With the state motto used as a headline for this entry, we direct you to the video of today's Senate session. Paid family leave is one of the few agenda items on this rare April voting day, and its debate and vote will consume the majority of floor time.

We'll post the final vote and CIANJ's response as soon as it happens.

Update: The Paid Family Leave Mandate has passed by a final vote of 21-15. Because of the "special" nature of today's vote, not all Senators were in attendance. We will post the roll call shortly.

In the interim, here is a link to CIANJ's press release.

Roll Call Vote on New Jersey's Competitiveness

Early this afternoon, the Senate will cast its final vote on whether to impose a paid leave mandate on virtually all employers in the state. It's a new week, and there is a new study regarding just how expensive the program will be. This time, it is the American Consumer Institute that claims the Office of Legislative Services has underestimated the program's costs.

Bill advocates have claim that only about 1% of New Jersey's workforce will utilize the program, and the bill uses these assumptions when setting the tax rate. This is based largely on California's experience with paid leave. What they fail to mention is that because it is so new, only 28% of Golden Staters know about the program. They also do not take into account the increasing number of paid leave applications and the rising costs - an $80 million jump in just two years. Remember, there is no contingency in the bill for what would happen if the $33 per year tax on employees is not enough to cover expenses.

This is all in addition to the issues of competitiveness and lawsuit exposure that we've already detailed here at NJ Business Matters.

It's a special voting session for an especially harmful bill. We will post updates throughout the day. 

Paid Leave Vote Monday

The Senate rarely meets in April, but Monday the 40 legislators will be back in Trenton to cast their final votes on the job-killing paid leave mandate. The program would make New Jersey only the second state with such a program, joining California, and the vote comes at the same time Governor Corzine admits tax receipts are coming in below expectations and that he may have to cut an additional $500 million from the state budget. Remember that the state has already lost more than 10,000 jobs in 2008.

When the Senate last voted on paid leave a month ago, it narrowly passed, 22-16. Since then we've learned a few things,

• Job losses for the year increased, bringing unemployment up .3% to 4.8%
• The non-partisan Office of Legislative Services indicated the bill could leave small businesses exposed to lawsuits.
• New data from California puts in doubt the assumption that only 1% of New Jerseyans will use paid leave. There are no details in the bill outlining what would happen if the paid leave program ran a shortfall.

All of this in addition to what we already knew - the mandate will harm New Jersey competitiveness, drive costs higher for our companies and put small businesses in the position where they may be violating federal anti-discrimination laws.

We need a special voting day for that? Click here to show your opposition.

Jersey Has Lost 10k Jobs in '08 - Time To Increase Payroll Taxes

A quick note to anyone who works for a company with at least two employees: New Jersey's paid family leave mandate may cost you more than bill advocates would have you believe (shocking, we know).

The paid leave program will be funded by an increase in the Temporary Disability Insurance (TDI) tax. Paid leave proponents workers stress that workers will be paying the maximum of $33 per year to fund the new program. Plus there's an initial raid of $25 million from the existing TDI fund with a promise to pay it back. Eventually.

That estimate is based on California's usage rate of about 1%. However, the State Chamber went out and polled their members who offer a paid leave benefit. They found that companies offering paid leave experience a utilization rate of 8%. They aptly point out that if the general population used paid leave at a number close to private sector use, the actual cost to workers in the state would be closer to $250 in keeping with legislators pledge not to have employers directly fund the program. Almost anything above 1% of eligible workers using the benefit would represent higher payroll taxes for workers in New Jersey.

Too bad the Assembly Labor Committee refused to consider a voluntary opt-out for employees in the state, huh.

Add this to the other problems we've enumerated here at CIANJ - decreased competitiveness, cost to employers, lawsuit liability and an economic downturn.  Remember, NJ is one of only six states with paid maternity leave. Maybe six weeks of paid time off for the mothers of newborn children is all we can afford.

Update: A loyal reader of NJ Business Matters wrote to remind us of this January 2008 study, which found fewer than 30% of Californians were aware of the Golden State's paid leave program. If more Californians learn about the program, then surely more are likely to use it - putting the 1% assumption in further jeopardy.

An excellent reminder from a savvy reader. Not to be outdone, CIANJ reminds readers that in January California saw 18,874 workers take advantage of paid leave - if that trend continued for the year, it would represent 1.3% of working Californians.

In The Face Of Job Losses, Add Mandates

Two e-mails just scurried across the inbox. See if you can make sense of them.

First, the NJ Department of Labor and Workforce Development released its February job figures, which show New Jersey lost another 1,700 jobs in February to add to the 8,600 jobs lost in January. Job losses were led by trade, transportation and utilities (-2,800), manufacturing (-1,100), and construction
(-500).

The unemployment rate climbed by .3% to 4.8%, which now matches the national average.

Simultaneously, NJBiz is reporting that Senate President Codey has announced there will be a special voting session, either later this month or in April, to vote on final passage of the Paid Family Leave mandate.

The meeting would include voting on the paid family leave bill and perhaps voting to confirm Gov. Jon Corzine's nominee for treasurer, David Rousseau, Codey's office said. Usually, legislators spend April focusing on budget hearings and no full Senate meetings are presently scheduled.

If the Senate passes the leave bill, it would go to Corzine, who has said he would sign it into law.

The bill (S-786) was scheduled for a vote this past Monday, but was delayed due to procedural questions.

At some point, legislators have to recognize the cause and effect of their votes, no?

Assemblyman DeCroce With Yet Another Reason To Oppose Paid Leave

Earlier this morning here at CIANJ's worldwide headquarters in Paramus, Assembly Republican Leader Alex DeCroce spoke with about 35 Commerce and Industry Association members about the state budget, the Governor's asset monetization (toll hike) proposal and paid family leave.

As always, we thank the Assemblyman for joining us and sharing the insights of his caucus.

Click here for his memorandum on paid leave, and its impact on doing business in New Jersey - especially the way in which the job-killer would impact small businesses. One noteworthy statistic from the brief:

According to an article in the Wall Street Journal on June 20, 2007, the federal Department of Labor estimates that paid family leave programs cost employers an average of $1.76 per hour per full time employee, or 6.8% of total compensation. Using the above hourly estimate, a company with just ten full-time employees would see an increase of approximately $36,608.

Click here to help stop this from making New Jersey an even more expensive place to live, work and do business.

Rough Month for Paid Leave Advocates

Regular blog readers all know that the business community's opposition to a paid leave mandate is multi-faceted.

First, we question the wisdom of imposing a mandate unique to New Jersey during a time that is either a recession or an economic slowdown. Remember, virtually every survey available puts New Jersey as the most, or one of the most, expensive places to do business.

Second, we have raised a host of legal questions - most dealing with potential conflicts with anti-discrimination laws. We also note the added hardship this will put on small businesses.

Remember, New Jersey is already one of only six states to offer paid maternity leave - up to six weeks, in fact. Maybe, that's all we can afford in these times.

In the interim, paid leave advocates have decided to respond by throwing around terms such as the "anti-family business lobby". We thought it would be a good time to recap what some independent analysis has determined - and this is just in the last month.

• February 27 - The Department of Labor and Workforce Development announces the state lost 9,500 jobs in January. It also revises its 2007 job increases down to just 3,700 private sector jobs created in an economy of 4.1 million workers.
• March 6 - The Attorney General notes the bill language, which had already been voted on by the Senate and by an Assembly Committee, is insufficient to protect small businesses from lawsuits under state law.
• March 12 - We learn of an Office of Legislative Services (OLS) report which finds that small businesses could be exposed to lawsuits if they do not provide job protection under paid leave. Remember, bill advocates claimed during the entire debate that small companies do not have to hold a job for an employee taking leave.
• March 14 - OLS determines that a Senate floor vote on paid leave cannot take place today, or it could be unconstitutional

Breaking: Paid Leave Bill Will Not Be Voted On Monday

Add this to the list of technical problems with New Jersey's proposed paid leave mandate.

The non-partisan Office of Legislative Services has advised that the legislation cannot be voted upon Monday by the full Senate, under ordinary Senate procedure.

The origin clause of the New Jersey Constitution requires that all legislation which taxes or increases fees must first be passed by the General Assembly and then the Senate. Paid leave was passed by the Senate on March 3rd and the General Assembly yesterday. The Assembly became aware of the issue and passed their own version of the bill, with the Senate's merged within it in an attempt to get around Article IV; Section IV, paragraph 6 of the Constitution. However, the Assembly version differed from the Senate version because of amendments following the Attorney General's letter regarding the lack of explicit small business protection.

OLS has just determined that the parliamentary maneuver does not allow the Senate to vote on the bill Monday. The bill must remain there for at least a calendar day and the Senate will not officially receive the bill until Monday.

It appears that the only options left for the Senate are to have the bill advance on an emergency vote, schedule a new voting session for Thursday or consider it during the next regularly scheduled session. To proceed on an emergency matter, the Senate would need a 3/4 majority - which will not happen.

Update: Senator Kean's Statement is now available on-line.
Update II: Senator Sweeney and Assemblyman Albano - the bill's co-sponsors - have asked the Senate President to pull the bill from Monday's voting schedule, based on the OLS memo. It is now unknown when the Senate will make its final vote.

Assembly Passes Paid Leave Mandate - Updated

The General Assembly just voted 46-30-2 in favor of passing the paid leave mandate on all New Jersey companies. Here are some of the today's highlights:

• During debate, Assemblyman Richard Merkt noted an Office of Legislative Services (OLS) report that found the bill may leave small businesses exposed to potential lawsuits. CIANJ has been stating this possibility since the bill's introduction. No amount of NJ bill language can supersede federal law.
• Bill proponents preferred to call the payroll tax of $33 per year an "insurance premium." That type of semantics is commonplace in debates, but remember the same advocates voted to table an amendment which would have allowed workers to voluntarily opt out of the program. That's a tax increase.
• Here's a link to CIANJ's press release.

The bill is expected to be voted upon Monday in the Senate. Because of an amendment made in the Assembly Appropriations Committee, the Senate must vote on the new bill language. The last time that Chamber took up the measure, it narrowly passed. There have now been two reports - one from the Attorney General and one from OLS - raising the lawsuit concern. The AG's concerns were intended to be addressed through amendments, but there are still many unanswered questions regarding conflicts with federal discrimination laws. Stay tuned.

Update: The final Assembly Roll Call vote is now available and pasted below. A "NO" vote is a vote against the paid leave mandate and consistent with CIANJ's position.

Angelini, Mary Pat - No
Albano, Nelson T. - Yes

Amodeo, John F. - Yes

Addiego, Dawn Marie - No

Barnes, Peter J., III - Yes

Biondi, Peter J. - No

Bramnick, Jon M. - No

Burzichelli, John J. - Yes

Caputo, Ralph R. - Yes

Carroll, Michael Patrick - No

Casagrande, Caroline - No

Chiappone, Anthony - Yes

Chiusano, Gary R. - No

Chivukula, Upendra J. - Yes

Cohen, Neil M. - Yes

Conaway, Herb, Jr. - Yes

Conners, Jack - Yes

Coutinho, Albert - Yes

Coyle, Denise M. - No

Cruz-Perez, Nilsa - Yes

Cryan, Joseph - Yes

Dancer, Ronald S. - Yes

DeAngelo, Wayne P. - Yes

DeCroce, Alex - No

Diegnan, Patrick J., Jr. - Yes

Doherty, Michael J. - No

Egan, Joseph V. - Yes

Evans, Elease - Yes

Fisher, Douglas H. - Yes

Giblin, Thomas P. - Yes

Green, Jerry - Yes

Greenstein, Linda R. - Yes

Greenwald, Louis D. - Yes

Gusciora, Reed - Yes

Handlin, Amy H. - No

Holzapfel, James W. - No

Jasey, Mila M. - Yes

Johnson, Gordon M. - Not Voting

Karrow, Marcia A. - No

Lampitt, Pamela R. - Yes

Love, Sandra - Yes

Malone, Joseph R., III - Abstain

McHose, Alison Littell - No

McKeon, John F. - Yes

Merkt, Richard A. - No

Milam, Matthew W. - No

Moriarty, Paul D. - Not Voting

Munoz, Eric - No

O'Scanlon, Declan J., Jr. - No

Oliver, Sheila Y. - Yes

Polistina, Vincent J. - No

Pou, Nellie - Yes

Prieto, Vincent - Yes

Quigley, Joan M. - Yes

Ramos, Ruben J., Jr. - Yes

Rible, David P. - No

Roberts, Joseph J., Jr. - Yes

Rodriguez, Caridad - Yes

Rooney, John E. - No

Rudder, Scott - No

Rumana, Scott T. - No

Rumpf, Brian E. - No

Russo, David C. - No

Scalera, Frederick - Yes

Schaer, Gary S. - Yes

Smith, L. Harvey - Yes

Spencer, L. Grace - Yes

Stender, Linda - Yes

Thompson, Samuel D. - No

Tucker, Cleopatra G. - Yes

Vainieri Huttle, Valerie - Yes

Van Pelt, Daniel M. - No

Vandervalk, Charlotte - No

Vas, Joseph - Yes

Voss, Joan M. - Abstain

Wagner, Connie - Yes

Watson Coleman, Bonnie - Yes

Webber, Jay - No

Wisniewski, John S. - Yes

Wolfe, David W. - No

Why Do We Learn About This Now?

If you haven't been following the debate on Paid Family Leave, then you might not know what a fan proponents of the bill have become of calling us the "anti-family business lobby". They say that we are not being "intellectually honest", are "liars" and that the program will not cause additional expense or be anti-business. We're all for the rhetorical jab, but some of what they're saying is ridiculous.

In the interim, we have been raising serious concerns of the bill - one of the most prevalent being how it interacts with anti-discrimination laws. While paid leave advocates insist small businesses do not have to offer job protection, certain protected classes could file wrongful termination suits under federal discrimination protections.

We've contended all along that the bill leaves employers exposed to potential lawsuits. Now, NJBiz has obtained a letter from the New Jersey Attorney General to the Labor Commissioner, which raises another concern as it relates to the bill's impact on small business.

"If the Legislature so intends, this bill should be amended to specifically preclude (lawsuits) since the current language of the bill does not do so unequivocally," Milgram wrote in the Feb. 27 letter to David J. Socolow, commissioner of the state Department of Labor & Workforce Development. (emphasis ours)

Why are we finding out about this now? This letter was sent before the Assembly Labor Committee hearing, and before the vote by the full Senate. So why did no one choose to release it? If the AP had not obtained a copy of the letter, when would the opinion have been made public?

We're glad the AG has finally paid attention to the issue - even if bill proponents were quick to poo poo it.

Senate Passes Paid Leave 22-16

Minutes ago, the New Jersey Senate gave final approval to S-786, which would make New Jersey only the second state in the country with a paid leave mandate on virtually all employers. Some notes on the comments offered by members of the Senate.

• Senators Kevin O'Toole and Joe Kyrillos both mentioned the state's economic climate, and noted New Jersey lost 9,500 jobs during the month of January.
• Senator Ron Rice abstained, based on the increased payroll tax the bill would enact (about $33 per year) and the fact there is no exemption for small businesses, such as those with 10 or fewer employees.
• Senator Shirley Turner voted "NO" because of the negative effect the payroll tax increase would have on her constituents and NJ's already high cost of living.

The roll call vote is listed below.

	Adler, John H. - Yes	Allen, Diane B. - Not Voting	Baroni, Bill - Yes
	Bateman, Christopher - No	Beck, Jennifer - No	Bucco, Anthony R. - No
	Buono, Barbara - Yes	Cardinale, Gerald - No	Ciesla, Andrew R. - No
	Codey, Richard J. - Yes	Connors, Christopher J. - No	Cunningham, Sandra B. - Yes
	Gill, Nia H. - Yes	Girgenti, John A. - Yes	Gordon, Robert M. - Yes
	Haines, Philip E. - No	Kean, Sean T. - No	Kean, Thomas H., Jr. - No
	Kyrillos, Joseph M., Jr. - No	Lance, Leonard - No	Lesniak, Raymond J. - Yes
	Madden, Fred H., Jr. - Yes	O'Toole, Kevin J. - No	Oroho, Steven V. - No
	Pennacchio, Joseph - No	Redd, Dana - Yes	Rice, Ronald L. - Not Voting
	Ruiz, M. Teresa - Yes	Sacco, Nicholas J. - Yes	Sarlo, Paul A. - Yes
	Scutari, Nicholas P. - Yes	Singer, Robert W. - No	Smith, Bob - Yes
	Stack, Brian P. - Yes	Sweeney, Stephen M. - Yes	Turner, Shirley K. - No
	Van Drew, Jeff - Yes	Vitale, Joseph F. - Yes	Weinberg, Loretta - Yes
	Whelan, Jim - Yes

Paid Family Leave Final Vote on Monday

Yesterday afternoon, the Assembly Labor Committee voted 6-2-1 in favor of passing Paid Family Leave. The bill still has another committee hearing in the Assembly, but will face its final vote in the Senate on Monday. Click here for this week's CIANJ Business Beat highlighting the proposed mandate, and here for the PolitickerNJ story on the closeness of Monday's vote.

As you know, the bill would allow employees to take up to six weeks off to care for a newborn or newly adopted child or a sick family member. Unlike FMLA, there would be no exemption for small businesses and eligibility would be based on wages earned per week, not hours worked. Regular blog readers also know that New Jersey is one of only six states with paid maternity leave. The overwhelming majority of family leave applications would be to add six weeks of paid family leave to the six weeks of paid maternity leave already in place.

During the committee hearing, which was held less than 24 hours after it was announced New Jersey lost 9,500 jobs in January - more than half of all the jobs lost in America, they struck down three amendments. The proposals which were dismissed would have:

1. Exempted companies with less than 50 employees from participating in the program. This would have brought the program in line with federal unpaid leave laws.
2. Exempted the top 10% of wage earners at a company, ensuring an organization would not miss key personnel for up to 12 weeks.
3. They even voted against allowing employees to voluntarily opt out of the program.

As CIANJ said with the Millionaire's Tax, the half-millionaire's tax, the sales tax increase and the steadfast refusal of the legislature to cut the size of government - at some point, those legislative actions are going to have negative results on our economy. Now that we have some of the highest costs of doing business in the nation, the impact is becoming apparent. We are a net loser in migration and now after a year of nearly stagnant job growth are in a net loser in jobs as well.

Call your Senator now or click here to e-mail them and urge them to vote no on Paid Family Leave.

NJ Loses 9,500 Jobs in January

Less than 24 hours before the Assembly Labor Committee considers a job-killing paid family leave bill, New Jersey's Department of Labor and Workforce Development issued initial job numbers for January, and revised its job growth numbers in 2007.

Unfortunately, the news is not good for the New Jersey economy. The sobering statistics include,

• The number of jobs created in 2007 was revised. The Department, which had estimated the creation of 29,400 jobs, downgraded that to 4,700.
• In January 2008, New Jersey's private sector lost 9,200 jobs, while government shed 300 jobs.
• New Jersey's job losses accounted for about 50% of the nation's job loss last month. NJ lost more jobs than any other state.

Clearly, this is a cycle in which government should be doing all it can to help New Jersey grow its way out of increasing unemployment compounded by one of America's highest tax burdens.

What it is not time for is an 800% toll increase and a paid leave program that applies only to New Jersey and California.

The Department of Labor and Workforce Development's press release and cross tabs are available here.

Update at 7:20 a.m. - Star-Ledger coverage is now available, including this quote from Rutgers economist Dr. James Hughs,

It was shocking -- we slipped from slow growth to no growth over the past year, and the decline in January was far worse than we had anticipated

Paid Leave Mandate Moves Forward

Thank you to the following Senators, who yesterday voted against imposing a paid leave mandate on virtually every employer in the State of New Jersey:

Senator Anthony Bucco, Senator Phil Haines, Senator Leonard Lance, Senator Kevin O'Toole, Senator Steven Oroho and Senator Shirley Turner

Unfortunately, despite the votes of the six Senators, the bill passed the Senate Budget and Appropriations Committee.

As you know, S-786 would make NJ the second state in the nation with a paid leave mandate on all employers. You also know that some small employers cannot operate with key personnel missing for six weeks, and that the law will create a logistical nightmare as it interacts with FMLA, NJ FLA and other state programs such as unemployment. A single solution forced on all companies will be unworkable for some.

While Congress is debating an economic stimulus package to jump-start the American economy during an economically slow time, New Jersey (already expected to have a shrinking population and already one of the harshest tax and regulatory environments in United States) is moving toward putting a burden on companies unique to the state.

The following Senators chose to vote yes on the bill and for paid leave,

Senator Barbara Buono, Senator Paul Sarlo, Senator Sandra Cunningham, Senator Dana Redd, Senator Teresa Ruiz, Senator Brian Stack, Senator Steven Sweeney, Senator Joseph Vitale

That's an 8-6 vote. Had any one of the eight Senators listed above voted differently, the bill would not have advanced.

Every vote counts, indeed.

Paid Leave Bill Back Before the Legislature; Questions Still Unanswered

We are two weeks into the new legislative session and Senator Steve Sweeney has re-introduced the paid family leave program we have discussed at great length here at NJ Business Matters. The most notable change from last year's bill is a reduction in leave time from the original 12-week plan down to six. California is the only state with an equivalent program, which the Golden State offers for six weeks.

The draft legislation is available here. It still does not offer the exemption for small businesses that federal law does and still leaves unanswered questions regarding interaction with existing NJ laws.

For example, if an employee at a small company is not offered job protection and takes the leave anyway, have they quit or have they been laid off? This has significant implications regarding the state's unemployment benefits. Also, if a company offers job protection to one employee and not another, are they in violation of the state's Law Against Discrimination? You get the idea.

The legislation would place a burden unique to companies in New Jersey and leave small businesses open to potential lawsuits, while forcing them to miss key personnel for extended periods. It's one heckuva strategy for getting us out from under the economic predictions put forth by Rutgers economist in which,

Nancy Mantell, director of the Rutgers Economic Advisory Service, is forecasting a 2.2 percent rate of annual state output growth between 2006 and 2017, slightly below her nationwide forecast of 2.5 percent in annual gross domestic product expansion.

"This differential is due to the relatively higher cost of living and doing business in New Jersey, as well as our lower rate of population growth, expected to average 0.6 percent," Mantell said....

She predicted the state's unemployment rate will be 5 percent in 2008, and will average 5.2 percent through 2017.

Senate Agrees - Voluntary and Creative Programs Work Better Than Mandates

The State Senate yesterday unanimously passed common-sense legislation that would allow school districts to establish 'sick banks' which would allow employees to use more sick days than they would ordinarily be allotted.

A sick bank functions by allowing employees to contribute their unused sick days to the bank. Then, if an employee had an emergency and needed more time off than they would ordinarily be eligible for, they could draw from the bank to which they contributed. The program would ensure that the sick employee had necessary time off and that the school system was not left short staffed.

Here at CIANJ, we applaud creative efforts such as this to care for sick workers while keeping an organization afloat.

Which brings us to Paid Family Leave (that seems to happen a lot around here lately). The bill passed yesterday, S-548, is voluntary - both in terms of employees who participate and towns that make the program available.

So if a creative and voluntary program is open to local governments, why shouldn't the same be available to companies? Remember that if you're an employee who has a paid leave benefit through your employer you still have to pay the tax increases to help fund leave for everyone else.

Blue Jersey has taken to calling opponents of Jersey's paid leave mandate as the "anti-family business lobby". The truth they refuse to acknowledge is that companies across the state already work with their employees so that they can care for sick relatives while still keeping the company solvent. That may mean work-from-home arrangements, working outside hours or paid or unpaid leave as part of the host of options. However, for government to require that every company or every size and every different type of industry offer the exact same solution is an intrusion which does not exist in 48 other states.

The whole non-competitiveness thing.

Real Questions on the Real World Impact of Paid Leave

The Asbury Park Press came out today in opposition to NJ's proposed paid leave mandate, leveling the same criticisms and offering the same questions we here at CIANJ have been since the onset of the debate.

The APP correctly points out that the job killer of a bill would put NJ at a competitive disadvantage with our neighboring states. Remember that only California mandates a similar program, providing a disincentive for multi-state corporations to expand their operations here.

They also raise the same questions we have regarding the impact on small businesses. For example, Governor Corzine has been touting that small companies can "opt out" of the program because they are not required to hold a position open (tangential argument: there are other requirements on all businesses such as record-keeping and notification mandates. No one has the option to ignore those, therefore the notion that a company can "opt out" of the program seems a bit odd).

The APP raises another specific question regarding whether or not workers could collect unemployment and paid family leave simultaneously:

The Corzine administration interprets the bill's language to mean small businesses can deny a worker's leave request, giving the person the option of staying or quitting.

The bill's sponsor, Sen. Stephen Sweeney, D-Gloucester, said small businesses wouldn't be required to hold positions for workers on leave and could lay them off. The difference between his and Corzine's interpretations would determine whether the employee would be eligible for unemployment benefits. That's huge.

We smell lawsuits. The ambiguity alone will be a field day for lawyers — more reason to let this bill die a quick death.

There are also other fundamental questions. For example, if a small business allows one worker job protection but not another, does that put the company in violation of the state's Law Against Discrimination?

These have not been answered, and until they are the echo chamber that has been the rest of the mainstream media - who by and large have been running through the talking points of liberal think-tanks and bill proponents - should have taken a more extended look.

Do Taxpayer Dollars Fund Advocacy for Paid Leave?

On Thursday, Steve Lonegan, Bogota Mayor and Director of the NJ Chapter of Americans for Prosperity, questioned the appropriateness of NJ Time to Care. The organization, which is part of Rutgers University, supports Paid Family Leave in New Jersey.

Lonegan raised the same questions CIANJ President John Galandak did in a letter to Rutgers back in September. CIANJ does not believe that advocacy on behalf of an issue before the legislature is an appropriate use of taxpayer dollars.

When Politicker NJ ran the story on Thursday, Professor Eileen Appelbaum, the Director of the Center for Women and Work was quoted as saying,

“We know working families need it and that it’s good for business, but we don’t lobby for any kind of legislation,” said Appelbaum, who noted that there is no reference to the legislation on the organization’s Web site.

NJ Time to Care's website reads,

New Jersey's existing Temporary Disability Insurance system (TDI) offers a perfect framework to build on. TDI already provides partial wage replacement to people who need time off from work for illness or injury. Expanding the current TDI into a family system would require only that workers make a small additional payment into the TDI fund-from.

In return, those who need it would get up to 12 weeks of paid family coverage per year. Like the current TDI system, family leave would replace two-thirds of weekly wages up to a limit that would increase every year to reflect the cost of living. In 2007 the top benefit is $502 a week.

So even though NJ Time to Care is quick to claim they don't lobby for specific legislation, they do offer a plan which is the same as what A-3812/S-2249 (as introduced) seeks to accomplish.

In addition, the organization's website has driven readers to take action in favor of specific legislation.

Click here to see an archived image of the site, downloaded on September 12th.

The graphic which reads, "Information on contacting your legislator CLICK HERE" takes readers to an e-mail drive in support of - you guessed it - A-3812/S-2249.

Isn't this advocating for a specific bill? Should taxpayer money be spent in such a way?

Speaker Roberts Says Current Paid Leave Bill Not Going to Advance

Speaker Joseph Roberts, leader of the General Assembly, told business leaders today that he feared the Paid Family Leave mandate currently before the legislature would put New Jersey at a competitive disadvantage. Therefore, the Associated Press quotes Roberts as saying,

"As the bill stands now, as the bill looks now, it's not going to advance. We need to continue to work on some of the details, some of the fine print.''

Senate President Codey mentioned possible changes to the bill, such as reducing the amount of leave time allowed to six weeks and exempting small businesses from the program - such as what is done at the federal level. FMLA recognizes that small firms, those with fewer than 50 employees, cannot operate without key personnel for extended periods.

The comments echo what Senators Tom Kean, Jr. (R) (who opposes the legislation altogether) and Paul Sarlo (D) told CIANJ board members last month. 

Maybe We Can Borrow Some Signs?

On Monday, December 11th of last year state workers marched on Trenton in protest of proposed changes to their benefits. The changes suggested, such as having future retirees pay one-and-a-half percent of their health insurance costs, grew out of the special legislative session on property tax reform. It's that last bit, we were told, that really drew the ire of public employee unions.

Workers rallied outside the statehouse proclaiming, as the protester's sign in the photo reads, "Negotiate, Don't Legislate!". They contended that a change in benefits belonged at the bargaining table and not by order of the legislature.

Today, those same unions will rally again in Trenton in favor of paid family leave. All two of you regular blog readers know our opposition by heart, but for the rest we'll link to CIANJ's At Issue briefing.

Many employers have decided that allowing workers paid time off to care for family members is a way to attract talent and something which can help attract a top notch workforce, and so they offer it as a benefit. You know - negotiate, don't legislate.

A single mandate on all types of employers of all sizes creates real world problems not imagined by Trenton.

So if you're strolling by the State House and see the flashy signs calling for a paid leave mandate, maybe you should ask the folks holding them why this benefit is OK to legislate, but the others weren't.   

People Follow Opportunity

The Small Business and Entrepreneurship Council has released its Small Business Survival Index for 2007, and for Jersey - the results aren't pretty. Our home state ranked 50th, edging out California and Rhode Island as the state most hostile toward small businesses.

Oh by the way, NJ is considering legislation that would make us only the second state to impose a Paid Family Leave mandate on all small companies.

The complete survey, which accounts for everything from tax rates, to electric rates, to health insurance mandates, is available here.

A theme we try to reinforce here at NJ Business Matters is that an unfriendly business climate has reverberations beyond the bottom lines of business owners. Anti-business legislators try to frame the argument as business owner greed versus working class need, but when businesses sour on a state, it hurts everyone.

It must be noted that countless issues play into human decision-making. But the impact of public policy often is very important. The relative governmental costs among the states will impact where people live and work, that is, where they seek opportunity. That most certainly is illustrated by where people are moving to and from among the states.

In terms of population growth, from 2000 to 2006, total U.S. population grew by 6.1%. As for the top 25 states in the 2007 Index, population growth over this period registered 8.2%, while among the bottom 26 (including the District of Columbia), population growth registered 4.1%. Therefore, the population in the top 25 states on the Index grew at double the rate of the bottom 26 on the Index over the period of 2000 to 2006. In terms of raw numbers, the top 25 added 11.1 million in population, while the bottom 26 added 7.3 million.

People follow opportunity. It's why New Jersey lost 72,000 residents last year. Hostility toward business drives companies and the jobs they create away from New Jersey. That equates to less high-paying jobs for our citizens and a depressed quality of life for us all. Public policy matters, and for a state ranked dead last in small business friendliness, it matters for us now even more.

No News Is Good News

The Assembly Labor Committee is scheduled to meet on Thursday, and paid family leave is not on the agenda. The same day that decision was made, Governor Corzine was speaking with the good people at the South Jersey Chamber of Commerce, telling them he was intent on getting the law passed by the end of the year.

"I am not convinced it is devastating to business practices and operations."....

He admonished the crowd of suit-clad executives that if they were "intellectually honest" they would look at the experience in California and see paid family leave does not impose a hardship.

First, if we are being intellectually honest, then one must admit that to compare New Jersey's economic advantages to that of California's is a false analogy. A business seeking to operate on the west coast is more geographically constrained than here in the east. Drive 2 hours from the Port of Los Angeles, and you're still in California. A 2 hour drive from New York City puts a business in any one of four states.

Second, the layering of Paid Leave with FMLA, FLA and the state's Law Against Discrimination will cause issues in New Jersey similar to those on the west coast. Conflicts as to whether an employee can be let go while taking leave have arisen in California, which led to Governor Schwarzenegger's veto of measures expanding his state's mandate.

The business community's opposition is not to allowing workers to care for loved ones. Businesses that can afford it provide for paid time off and work with employees in ways to aid them and ensure necessary work is accomplished. In fact, in January CIANJ will be offering its Human Resource Council a seminar on exactly that issue. However, requiring every type of company of every size to follow the same remedy intrudes on basic business practices. We've already seen challenges arising from unpaid family leave at the federal level and the genuine hardships aspects such as intermittent leave have generated. Isn't it time we addressed those before imposing another only-in-New Jersey mandate on Garden State companies?

We'd Like to Introduce the Star-Ledger to Themselves

Back in October, the Star-Ledger editorialized that NJ was driving businesses out in droves and that the state needed to create policies designed to attract business. Who could disagree with such a common-sense statement as,

More than anything, the Hughes-Seneca report is proof that papering over problems from one election to another doesn't work. Eventually, steps must be taken to make New Jersey a place where businesses want to locate and ordinary people can afford to live.

So naturally, Thursday the paper decides to demand that legislators pass the most anti-business piece of legislation to be seriously considered this year. The Ledger has called for Paid Family Leave to be passed during the lame duck session.

Regular readers know this all by heart. Paid leave would put New Jersey at a competitive disadvantage as only NJ and California would mandate that every company provide this time off. We only wish the editorial board at the Ledger agreed with itself when they wrote,

In a global economy, location alone isn't enough. Companies look for equitable, stable tax policies as well as a diverse and skilled work force.

The advantages of opining. 

AARP Joins Big Labor In Support of Paid Leave Mandate

The AARP, and organized labor yesterday announced they were joining together in the hopes of pushing a paid family leave mandate on all employers by the end of this legislative session.

"Paid family leave is a win-win for all in a decent, caring society," Marilyn Askin of AARP New Jersey said at a news conference in Trenton.

Nothing like taking the moral high ground against the 48 other states which must be something other than caring and decent, eh?

Remember, if S-2249 would pass the New Jersey government would mandate a benefit be given to employees unlike any place else in America. Add that to a business tax climate ranked 49th by the Tax Foundation and a population that lost 72,000 residents last year and half the remaining population wishing to follow them and you set yourself up for a situation whereby NJ starts to lose the prosperity and jobs it has built over generations.

Those facts must remain prevalent as proponents of paid leave have a compulsion to not put the discussion in context of NJ's overall business climate.

Can You Hear Us Now?

In your blogger's opening line for his column in this month's COMMERCE Magazine, I compare paid family leave to a weight loss plan in which you can lose 20 pounds instantly. It has appeal at first - until you realize the plan involves the loss of a limb.

Who wouldn't be in favor of a plan that pays people for their time away from work to care for their families?

The trouble is this policy would not occur in a vacum. We already have the 2nd most harsh tax and regulatory environment in the US (take that Rhode Island!) and are lost 72,000 residents last year. It's hard to grow and economy and sustain a high quality of life with fewer workers to do the growing. To pass a law now that would make New Jersey the second state in the nation with a paid leave mandate on all employers would be a job-killer. Companies do what they can afford in terms of time off to care for sick family members, but maybe what they can afford is 6 weeks and not 10. Putting the same requirement on all companies in all circumstances interferes in the employer-employee relationship like nothing else - - a point driven home by CIANJ President John Galandak in today's Record.

"It's just rife with pitfalls," John Galandak, executive director of the Paramus-based Commerce and Industry Association of New Jersey, said of the bill.

"We are one of only two states that would have it," he said, referring to California as the other state. "It's another mandate, another regulation, that you have to comply with to work here."

Galandak said he also will be watching for efforts to pass budget appropriations that are sneaked through in the end-of-session rush.

"It's traditionally a time of year when Christmas tree appropriations, or special appropriations," are passed, he said.

"By everyone's account, we are facing a $3 billion gap next year. Let's not add to that."

Spreading the Truth About Paid Family Leave

This morning, CIANJ's Board of Directors gathered for its quarterly meeting to hear about a host of issues and achievements involving the association and what we can expect from Trenton in the Lame Duck session. A special thanks to Senator Tom Kean, Jr., Sen. Paul Sarlo and Assemblyman-elect Declan O'Scanlon for joining us.

Once again, board members were forced to endure yours truly speak about the issues facing NJ businesses during the lame duck session. And of course, we mentioned the most anti-business bill to be considered by the legislature this year: paid family leave. The bill would intrude on the employer-employee relationship like nothing else in the country. Even more business leaders were engaged on the issue this morning and are paying attention to who cares -- and who doesn't -- about New Jersey's competitiveness.

To view the CIANJ At Issue brief on Paid Leave, click here.

To view a brief PowerPoint presentation on the issue, including setting the issue within the framework of NJ's overall business climate, click here.

The Votes Are In

NJ.com is reporing on today's caucus leadership selections in Trenton. In the Senate, Democrats chose to keep Senator Codey as President of that body with Senator Steve Sweeney getting the nod for majority leader.

Republicans chose to select Senator Tom Kean, Jr. as their leader for the next legislative session, replacing Senator Lance.

In the Assembly all leadership positions will remain unchanged.

Assembly Republican Leader DeCroce and Senate Republican Leader Kean were both endorsed by PENPAC during the past election cycle.

It was also announced that the Assembly Labor Committee will consider the job-killing paid family leave bill on December 6th. CIANJ and member companies will be in attendance to testify as to the harms A-3812 will inflict on the NJ economy. To check out our At Issue brief on paid leave, click here.

Making Perverse Incentives Pay

This morning at the inter-galactic headquarters of CIANJ our Human Resource Council will gather to stay updated on legal issues impacting the HR community in a presentation titled,  Sexual Harassment: Challenges in the Evolving Workplace by the uber-talented Annemarie Simeone of Norris McLaughlin Marcus, P.A.

Before the main event, attendees are forced to hear your friendly neighborhood blogger discuss the perils of New Jersey's proposed Paid Family Leave mandate. The job killer of a bill would allow employees at virtually all companies to take up to 10 weeks of paid time off to care for a newborn or newly-adopted child or a sick family member. It may seem harmless at first glance, but as the layers of the program are unwrapped, you begin to realize the ways in which it will drive taxes up and jobs to other states. Doing this at a time when NJ has the nation's second highest tax burden, highest property taxes and is losing 70,000 residents per year only compounds the problem.

To read the CIANJ At Issue Briefing on Paid Family Leave, click here.

Insert Witty Terminator Reference Here

While Governor Corzine and some members of the legislature consider placing a paid family leave mandate on virtually all New Jersey employers, California's Governor is acknowledging that paid leave in the only state with an existing mandate needs reform. Today's San Fransisco Chronicle reports on the governor's veto of bills that would expand California's paid leave program.

"While some expansion of existing law may have merit, these laws in combination are too expansive and also fail to recognize the need for reforms to current law," Schwarzenegger wrote in a veto message shortly before his Oct. 14 deadline to act on bills from the 2007 legislative session.

California now requires firms with 50 or more workers to provide up to 12 weeks of unpaid leave for serious personal illness, bonding with a new baby or caring for a seriously ill dependent child, parent, spouse or domestic partner.

California also provides up to six weeks of paid family leave - funded through employee contributions to the state's disability insurance program - for baby bonding or care for an ill spouse, child, parent or domestic partner.

To contrast the existing New Jersey proposal with the California program, readers should know that NJ employers would be required to provide up to 10 weeks (versus 6) of paid time off to care for a newborn or newly-adopted child or sick family member. There would be no exception for small businesses, as there is in federal law. Also unlike federal law, part-time employees would be eligible to take up to 10 weeks of paid time off and the entire program is funded by a tax increase on workers.

Readers should also know that in the case of a newborn child, New Jersey is already one of about six states which provides paid maternity leave. The ten weeks of family leave would be in addition to the maternity leave.

Schwarzenegger cited the need to clear up confusion as layer upon layer of laws have been authored without much regard for what has already been written. The same situation could arise in New Jersey, as FMLA, Paid Family Leave and the Law Against Discrimination interact. For example, PFL advocates point out their bill is "business friendly" (despite businesses and business groups noting otherwise) because a small business would not have to guarantee a job be held open if leave is utilized.

Sounds fair, but in California the overwhelming majority of those using PFL were the mothers of newborn children. NJ's Law Against Discrimination has protections for pregnant women. The policies appear to contradict one another and would be ripe for lawsuits.

Isn't it time legislators answered some of these questions while chatting up their pro-business credentials on the campaign trail?