Government, Courts, and the World of Work

When the so-called paid family leave bill passed the Senate and was heading to Governor Corzine’s desk for signature, it culminated a decade of efforts by labor and other activities to provide family leave insurance as a basic benefit to workers.  But the new insurance law is a piece of a bigger legal puzzle for employers in the state.

The federal and state legislation on the horizon will have the biggest impact on the workplace in a generation. Employers, small and large will need to understand new rules and regulations, as management grows more complex.

Already this year, New Jersey has seen a new religious discrimination law, a military leave law, a plant closing and severance law, new regulations implementing the state’s family leave law, and an updated directive on independent contractors. The federal government has been just as busy, amending the medical leave law, issuing new guidance relating to employees who are caregivers, issuing new immigration rules, and enacting a genetic information discrimination law.  And there are rafts of other proposals that are gaining momentum, including major overhauls of the nation’s immigration and health care laws. The cumulative impact of these new laws and regulations will change the workplace dramatically. EANJ’s 92^nd Annual Meeting on June 20^th will provide a special legal briefing on what to expect for next year and beyond.

In addition to a briefing on family leave insurance, the meeting will address proposals to bring universal health care to New Jersey, a bill to make union organizing easier and proposals to amend the Americans with Disabilities Act.

For more information on the June 20^th Annual Meeting, click here: http://www.eanj.org/calendar/CalendarEventDetail.asp?CGUID=%7B0D60E052%2D6C1B%2D4762%2D8B51%2DE2DDEF615EEF%7D&CIID=ent%5F1430&CIV=8.  

After the bruising battle over paid family leave, supporters of universal health care coverage were relieved when business lobbyists expressed enthusiasm for a legislative proposal to cover every resident in New Jersey. Perhaps proponents should be mindful of unintended consequences.

Most of the adult citizens who are uninsured are employed, primarily by a small business.  According to federal statistics, 54.3% of New Jersey employers with fewer than 50 employees provide health care coverage. This represents about 135,550 employers that employ 737,500 people. 

The biggest reason reported by small business for not offering health care benefits is expense.  In 2007, the average amount that employers paid toward their workers’ health insurance premium rose 9.4% to $7,139. Small employers actually pay more because they do not enjoy the economy of scale derived from a large headcount.

Proponents of universal coverage believe that the small employers who currently provide coverage will likely continue to do so because their premium costs would stabilize over time as more people become insured.  This assumes that as the insurance pool increases, premiums will drop. However, when the state reformed the small employer market in 1993, premiums have increased each year thereafter. In any event, research conducted by The Commonwealth Fund in 2002 indicates that even a 30% reduction in premiums would cause only about 15% of currently uninsured small employers to offer coverage.

It could be that the greatest risk of universal health care coverage is that small employers who are already providing health care insurance to their employees will simply choose not to sponsor a health care plan knowing that their employees will still be covered by a state–mandated plan. Advocates of universal coverage are taking a big leap of faith that small employers will not respond to this incentive to cut back or drop coverage entirely.

Having passed the Assemby, the Senate postponed action on the so-called paid family leave.  The bill would entitle employees up to six weeks of wage continuation to care for ill family members and newborns.

Opposition has been fierce, but in the end an obscure constitutional requirement requiring a super-majority vote on procedural issues  caused the Senate  to postpone a vote until it reconvenes later this year.

Opponents have argued that the bill would cost jobs, even though employees would pay for the benefit and there is no empirical evidence suggesting wage insurance would cause employers to restrict hiring.  Nevertheless, the fear of red tape and absent employees has caused small business to mount a sustained attack. An economic down turn has caused even more anxiety.

Time appears to be  on the side of those who seek to derail the bill.  The economy appears to be in a recession and legislators do not want to be branded as insensitive to business.

On the other hand, some in the executive branch and their labor allies are anticipating a Democrat in the White House later this year and they would like nothing better than to get national recognition for paid family leave.  Indeed, there is speculation that the NJ bill will be a model for national legislation.

As noted in an earlier post, paid family leave represents good social-economic policy; but right now, opponents have the better political club.

The first President Bush vetoed the Family Medical Leave Act twice.  Bill Clinton signed it.  It requires employers with 50 or more employees to provide up to 12-weeks off for disability leave or for employees to care for ill family members.  The law is complex and creates a fair amount of litigation.

Now legislation has been introduced in both the House and Senate to extend FMLA coverage to employers with as few as 25 employees and include at least 24 hours of “school involvement leave.”

Could this be de ja vu all over again? The second President Bush is sure to veto the bill when it reaches his desk. What about the next guy (or gal)? Odds favor an expansion in 2009.

Legislation has been passed to crackdown on employers who discriminate against employees for practicing their personal religious beliefs.

The legislation (A-3451) would expand the protections provided under the Law Against Discrimination to include protecting employees from losing promotions, retaining employment, or making a transfer based on the fact that the employee has specific religious obligations. The bill would require that an employer make an accommodation to the employee, unless the employee’s actions will cause undue hardship for the employer. 

Employees taking time off for religious purposes would be allowed to make up time with the employer at a mutually convenient time or the employee would have an option to take a leave with pay.

Governor Corzine has not indicated whether he will sign the bill. Or he may conditionally veto it.  In either case, the bill goes beyond Title VII protection and will apply to every NJ employer regardless of size.