On behalf of our member companies that make NJBIA the largest statewide business association in the nation, I write to you in opposition to Assembly Bill No. 822 which creates the “New Jersey Domestic Workers’ Bill of Rights Act.”
This legislation goes far beyond impacting just domestic workers and will impact the business community more broadly through the insertion of the ABC test, which is used to classify independent contractors, into the state workers’ compensation law. This provision will impact independent contractors across all industries and alter the entire worker’s compensation system. This provision must be removed in order to tailor this legislation and address the targeted population of domestic workers without harming businesses overall. Moreover, this provision is unnecessary even as it pertains to domestic workers as they are already covered by workers’ compensation through their employers or by the homeowner’s insurance policy of the residence in which they work.
Outside of our concerns regarding how this legislation will impact the business community at large, we have several concerns with the impact this bill will have on the domestic work industry. NJBIA fully supports ensuring that workers in our care economy are afforded the same protections and fair treatment for their important work as workers in other sectors. Bad actors that exploit domestic workers as outlined in the beginning of this bill should absolutely be rooted out. However, this legislation goes beyond ensuring domestic workers are fully protected and afforded the rights established in the various state labor laws currently in statute incorporated in this bill.
This legislation includes provisions to ban restrictive covenants for domestic workers. The term restrictive covenant is broad and can capture a number of different agreements. There is currently legislation pending in the Legislature to address restrictive covenants more broadly. Rather than addressing restrictive covenants in an isolated manner through this bill, it should be removed. As you may know, NJBIA has been advocating for an alternative to A3715 regarding restrictive covenants. Our proposal is to ban non-competition agreements with any low-wage workers. As a matter of consistency on our position on this issue, we suggest removing this provision and allow it to be addressed more broadly through other legislation.
Additionally, Section 22 of the bill creates joint and several liability between individuals and employers with an overlapping employment relationship with a domestic worker. This section is very vague and can create joint liability between multiple businesses and/or private individuals who may employ the same domestic worker. This provision will hold individuals and businesses responsible for incidents or violations that are completely out of their control, which can lead to both civil and criminal penalties for employers.
In addition to these provisions, many of the benefits included in this bill, such as break times, termination notifications, and days off, are not present for other types of workers in other parts of state or federal law. These types of benefits are typically negotiated for workers through collective bargaining or their employment contracts and can vary based on the business and the nature of the work being performed.
For employers that failure to allow for the newly mandated meal and/or rest periods included in the bill, either due to lack of ability or the nature of the domestic work (medical or childcare), indicates that the domestic worker is entitled to an additional one hour of pay. This goes beyond ensuring that workers are paid for hours worked which is legally required under the Fair Labor Standards Act and mandates additional payments for workers. This will complicate calculations for overtime compensation. The two- and four-week termination notification requirements are also not fair for the employer community. Conversely, this bill does not require employees to provide two or four weeks of notice before they leave their position. This mandate strikes against standard at-will employment and eliminates a sense of balance in terms of employment.
Finally, the new advisory board and regulations in the bill, as well as the extensive penalties and legal liabilities created by this bill, will have a significant impact on a wide range of businesses and employees due to the expansive definition of domestic worker captured by the legislation. Each type of domestic worker and business model faces differing needs, challenges, roles, and regulatory frameworks that are already in place that must be considered. This all comes at a time when our care economy is facing a severe shortage of workers that employers and our residents so desperately need. While seeking to provide additional safeguards for workers, legislators must take into consideration the negative impacts this legislation will have on businesses that are crucial to our care economy and ultimately accessibility of services for residents.