Having settled their differences over legislation to expand paid family leave in New Jersey, the Senate and Assembly have sent a bill to the governor’s desk, where it faces an uncertain future.
On the one hand, S-3085/A4927 would cost neither employers nor employees any additional money. Employers do not now pay, and still would not pay, any cost for the paid leave that workers take. And while the maximum weekly leave payment would increase by almost $300, the legislation contemplates no need to raise the $33.50 annual tax all state workers pay because the fund consistently has a surplus.
On the other, Gov. Chris Christie has been loath to impose additional regulations on businesses, and this bill would force more businesses to give workers time off to care for a family member and double the number of weeks they would have to hold an employee’s job open during their time off.
A big push
Still, the Democratic leaders of both houses of the Legislature saw the issue as important enough to reconcile their competing plans and push the expanded leave program through their houses.
Although the bill does not go quite far enough for New Jersey Policy Perspective, a progressive think tank, the group is urging Christie to sign the bill to make it more attractive for eligible workers to take leave when they need it.
“Improving New Jersey’s paid family leave program will boost the state’s workers, families, and businesses. In particular, updating the wage replacement levels and caps will help ensure many more of the New Jerseyans who pay into this program are able to use it when they need to,” said Jon Whiten, NJPP vice president. “Expanding job protections to all workers would do the same, so workers can take leave without having to fear that their job will be gone when they come back. This bill takes a small step in the right direction by extending these protections to about 350,000 workers of the 1 million who currently lack them, but it leaves nearly twice as many behind.”
Because the bill would not apply to businesses with fewer than 20 workers, it leaves about 666,000 workers, or 19 percent of the state’s workforce, ineligible to take paid leave.
Still, the measure would go far to broaden the rights and benefits for an expanded number of workers who could take paid leave. These reforms are needed to the eight-year old program, according to advocates, because relatively few people have taken family leave, because they either don’t know about it, can’t afford to live on the low payments, or fear they will be unable to get their job back when they return from leave.
The bill addresses all of those issues and others:
The bill would not, however, change the fee all workers pay to the state fund that pays leave benefits. The state Office of Legislative Services estimated that the bill, if enacted, could lead the total amount paid — $88.7 million last year – to increase more than 1.5 times to $236 million. The fund typically has a surplus and any expected increase would be at least partly covered by ending diversions of that surplus for other budgetary uses.
Paying for itself?
But Michele Siekerka, president and CEO of the New Jersey Business and Industry Association, doubted that an expanded leave would continue to pay for itself with the current tax rate.
“Increasing the cost of the program without adjustments to the payroll tax that pays for it all means the fund will soon be depleted as more employees qualify to take a longer leave and receive increased benefit checks,” said Siekerka. “If this legislation becomes law, there’s no doubt the Legislature will look to increasing payroll taxes to keep the fund from going broke.”
Sen. President Stephen Sweeney (D-Gloucester), a prime sponsor of the bill, touted its benefits.
“This is a pro-family bill that allows workers to meet their health and family needs without jeopardizing their economic security,” said Sweeney, who authored the original law that took effect in 2009. He said the expansion of the benefits should lead to greater public awareness of the program and prompt more workers to use it.
‘An invaluable law’
“This is an invaluable law, but it’s underused and needs improvement,” said Assemblyman Vincent Prieto (D-Hudson), also a prime sponsor of the bill. “We need to build upon the existing law to make it better and more relevant to today’s working families. People can’t take advantage of this program if they don’t know about it and they won’t take advantage of it if it doesn’t help them.”
According to an analysis by NJPP, on average, only 31,000 New Jerseyans take leave to care for a new child or sick relative every year. That’s just about 12 percent of the workforce. The usage rate has remained relatively flat since its enactment in New Jersey, while in California, the rate of those using paid family leave has been increasing annually.
But Siekerka said the bill would make it more difficult and more expensive to run a business in New Jersey, particularly for smaller businesses.
“This legislation will make New Jersey less affordable for the business community and less competitive with our No. 1 outmigration state of Pennsylvania,” she said. “Small businesses will have to pay overtime to other workers or hire replacement employees for longer periods of time if this legislation becomes law. This will make New Jersey unattractive for new businesses and impose further hardship on those already here.”
A boon for businesses
Whiten said that despite opposition from the business lobby, paid family leave in New Jersey has been shown to be a boon for businesses, particularly small businesses, who can now compete with larger, richer corporations when it comes to certain elements of their benefits packages because the state leave is available. Nearly every survey has found an overwhelming majority of New Jersey businesses have not seen a negative impact on profitability or productivity from the paid family leave law.
Prieto said the bill includes “commonsense progressive changes that everyone should be able to support,” including businesses.
The Senate gave it final passage on Monday by a 22-15 vote, with just one Republican — Robert Singer, who represents parts of Monmouth and Ocean counties in the 30th District — supporting it and Democrats Jeff Van Drew of Cape May and Shirley Turner of Mercer voting “no.” Last week, the Assembly passed the measure 49-23 with Chris Brown, running for the Senate in the 2nd District center in Atlantic City,4 casting the only GOP vote for the bill. Van Drew’s district mates Bob Andrzejczak and Bruce Land were the only Democrats voting “no” in the Assembly.
If Christie signs the bill, most of its provisions would take effect July 1, 2018.