NJBIA testified Monday in opposition to legislation that would require small employers to comply with the job reinstatement provisions of the New Jersey Family Leave Act, which currently only applies to companies with 30 or more workers.
NJBIA Vice President of Government Affairs Elissa Frank said Bill A-5166, which would impact employers with as few as five workers, would lead to litigation and higher costs associated with retaining workers on leave while hiring new workers to do their jobs. Employers are required by law to maintain the absent employee’s benefits, such as group life insurance, health insurance and more while they are on unpaid family leave.
The bill was advanced in a 7-4 vote by the Assembly Appropriations Committee. Assemblymen Brian Bergen (R-25), Jay Webber (R-26), Kevin Rooney (R-40) and Antwan McClellan (R-1) cast the “no” votes, citing the devastating consequences for small businesses. The full General Assembly is now scheduled to vote on the bill Dec. 21.
“I know I’m not going to change your votes,” Bergen told his colleagues as the contentious debate reached the one-hour mark. “I’m just tring to insert some common sense. The average small business owner makes $60,000 a year. The average small business owner isn’t driving around in a Maserati and flying around in a private helicopter. They are struggling to make ends meet in this state. This (bill) will make it more difficult for them.”
Frank noted that the New Jersey Family Leave Act (NJFLA) requiring job reinstatement currently applies only to companies with 30 or more employees because larger businesses are more able to provide coverage during a worker’s prolonged absence and reinstate him or her when they return. By reducing the employee threshold to five, the law’s original provision to protect smaller employers is lost.
“Consequently, small businesses – many of which are not financially equipped to bear increased employee absenteeism – will likely experience higher labor costs occasioned by retaining and training employees to substitute for absent employees,” Frank said. “This will make New Jersey unattractive for new businesses and impose further hardship on those already here.”
Additionally, the bill extends reinstatement rights to all recipients of Family Leave Insurance (FLI) benefits, a separate partial income replacement program which currently does not guarantee job reinstatement. As a result, employees who are denied reinstatement upon returning from a period of paid leave will have a common law right of action against their employer, and small businesses will bear the cost of defending those claims, Frank said.
“These litigation costs can be unduly burdensome, especially for small businesses who may be unable to restore an employee to employment,” Frank said.
Assemblyman Webber, who is also an attorney specializing in employment law, said the legislation would completely remove the flexibility from a small businesses that might want to work out an arrangment with a critical employee, such as a bookkeeper, to work part-time in order to care for a sick parent, instead of taking a 12-week, full-time family leave. Under this bill, a mom-and-pop business would “walk yourself into a lawsuit” by doing that, he said.
“You’re completely taking the flexibility away from mom-and-pop shops from having these discussions in a way that is constructive,” Webber said before casting his vote against the legislation. “Guaranteeing this 12 weeks, I think interrupts their operation and again, will create a spate of lawsuits.”
This story was updated with the committee vote.