Government, Courts, and the World of Work

The state Senate today gave final legislative approval to a bill to allow workers to take paid leaves of absence to care for family members, voting 21-15 in favor despite the objections of opponents who said it will hurt the state’s economy and make New Jersey less competitive.

The paid family leave act (A873) would allow workers to apply for up to six weeks off to care for a newborn or newly adopted child, or a sick parent, spouse or child, and collect up to two-thirds of their pay, up to a maximum of $524 a week. The benefit would be funded by an average worker contribution of about $33 a year, levied through a mandatory employee payroll tax. The bill now goes to Gov. Jon Corzine, who has said he will sign it into law.Sponsors say employees should not be forced to choose between their jobs and their families when a new child arrives or a loved one has a health crisis. Opponents contend the measure will add to the cost of doing business in New Jersey and prompt some employers to take their jobs elsewhere.

However, the bill would not require small employers to grant a leave of absence or keep a job open with a guaranteed right to reinstatement.

In fact, on its way through the Legislature, the bill was substantively re-written to offer broader legal protection for business owners with fewer than 50 employees. It now gives small-business owners the right to fire and replace an employee who takes family leave if the company says it cannot operate without a key position filled. 

What’s certain is that the law wll require a learning curve for small business. It will require additional posting, notice, and reporting procedures. Will it be a hassle? You bet. Will it impose a new legal burden? Not really. Although for small businesses who think that they are immune to workplace regulations, mistakes could be costly.

Everyone is referring to the proposed wage protection benefits for employees who care for ill family members or newborns or newly adopted children as a “paid family leave.” But truth be told:  it’s not a leave law.  So, the real question is whether it will impose a legal burden on employers, particularly small employers, that would outweigh the benefits to workers? 

We believe that much of the confusion about this issue is related to how the current short-term disability insurance law is perceived by many employers.  Many believe that the law grants 26 weeks of leave.  As a result, a type of social contract has emerged between employers and employees who receive such benefits.  In short, employers typically do not terminate the employment of such individuals unless there is good cause to do so.  The business lobby has called this a “mandate” the kiss of death for employers. But the reality is that without guaranteed job protection, an employee would have to decide whether to take time off and the employer would have to decide whether to accommodate his/her return, basically the same as it works now.  Therefore, we do not expect that “paid family leave” will significantly disrupt the existing practices and policies of employers.

What is certain, however, is that when viewed together with other laws and regulations, such as the FMLA, NJLA, and state and federal discrimination laws, administering the thing may require some smarts, which employers should have anyway, given the existing alphabet-soup of laws.   

So, “paid family leave” will require employers to learn how to administer something new.  It will require additional posting, notice, and reporting procedures. Will it be a hassle? Oh yes. Will there be a learning curve? You bet. Will it impose a new legal burden? Not really.

Since our last post, Governor Corzine has made a public statement regarding his support for paid family leave in NJ.  He said that “I think we ought to move it. I’d rather move it in lame duck. But if we don’t move it in lame duck, it will be an agenda item that’s near the top in the new legislative session.” Not exactly a call to arms.  Senate President Richard Codey had this to say: “We’ve got to understand there’s a need for this.” So after a decade, there is still a misunderstanding about whether paid leave is necessary? Why the ambivalence? What’s the point here? Is paid leave something that New Jersey really needs or is this bill merely an annual ritual to give labor and academic constituents a sympathetic ear without actually enacting anything?  The business lobbyists are loving this.  They count on it to demonstrate their usefulness. It’s the classic political football.

Advocates of paid family leave have been trying to get such a law enacted in NJ for nearly a decade.  Now was the time they said: a sympathetic Governor, legislative leaders in both chambers willing to post it for a vote, and some intellectual heft from some think tanks. So what happened? Well, in this lame duck session, legislators seem more distracted than usual.  For some reason, the Governor has introduced a school funding proposal and the controversial issue of NJ’s death penalty is being debated.  No matter that no one has been executed in the state in 44 years.  In any event, legislators have used the excuse of a poor economy to delay an Assembly committee hearing. 

Funny that the Commissioner of Labor was just saying how the economy is in good shape because the state’s unemployment rate is lower than the US as a whole.  And there has not been a word from the Governor’s office, which has been losing key staff members recently.  Just not a priority. On the other side, business groups were successful in labeling a modest leave proposal with no employer contribution, and no guaranteed job reinstatement as a “mandate.”  Where were the labor and academic proponents during this onslaught? Except for a few editorials, I don’t even remember seeing a letter to the editor.  

However, demographic trends (working couples and single moms squeezed between caring for children and aging parents) means that the issue of some form of wage protection when workers need to take a few weeks off to care for ill family members is not going to go away. But if the last week or so is any indication of how advocates plan to advance their cause, I think that we will have to wait another decade. Is that a good thing?

Its been my experience that most employers, regardless of their size, do not deny employees with legitimate reasons to take time off to care for family members.  Usually paid time off can be used for this reason. People of good will have a way of working things out. And maybe that’s why there is no paid family leave in NJ.  Most employers are not the unscupulous, greedy people that political hacks make them out to be and most employees are not looking for a free ride.   Somehow the work gets done and family needs get met.  Its really the full-time worker  without paid time off benefits that really needs the law. This is a relatively small segment of the state’s workforce. Maybe this is why we don’t have paid family leave in NJ and are not about to get it any time soon unless advocates can demostrate a need and muster up some passion.