Gov. Phil Murphy signed a bill Tuesday that would expand paid family leave to 12 weeks, double the current six weeks, and increases the pay workers are eligible to receive.
The bill received strong pushback from the business community, which has expressed frustrations over the back-to-back-to-back impacts of raising the minimum wage, expanding paid sick leave and the additional taxes that have been implemented since Murphy took office.
“Once again, small business in New Jersey has been hit with another costly mandate seemingly without any thought or concern of the cumulative impacts of the other mandates already placed on their backs, like expanded paid sick leave and a $15 minimum wage, as well as the highest business taxes in the nation,” Michele Siekerka, CEO and president of the New Jersey Business & Industry Association, said.
“New Jersey companies know what it takes to attract a competitive workforce, and those who can afford to offer competitive packages and provisions do so. But businesses do not have the luxury to consider statewide mandates in a vacuum, as a single requirement. All mandates have an impact on the cost of doing business. Over the course of the last year, New Jersey businesses have had to deal with numerous costly benefits that contribute to how we are a very high cost state to operate a business. It makes New Jersey less competitive.”
Michael Egenton, vice president of the New Jersey Chamber of Commerce, said the issue isn’t necessarily the benefit itself, but rather the pileup effect that will eat at small businesses’ bottom lines.
“We’ve never had all these issues piled one on top of the other,” he said. “Even the pay equality bill, not that our members disagree, but to comply with the regulations, they are waiting (for the regulations) to come out and what financial impact it will have on their institutions.”
Egenton said the millennial workforce, which expects such benefits, is a reason to support the law. He also thinks men may be more likely to take advantage of paid leave.
Murphy said getting anyone to use such a law has been an issue in the past.
The program has not been well advertised in the past, he said, leaving workers to choose between a paycheck and caregiving. Because of this, Murphy said, some money is being set aside to create more awareness and utilization of the state-run program.
The expanded family leave bill does include protections for employers, including requiring proof of need from the employee, advance notice requirements and ensures middle- and low-income workers are the true beneficiaries — by disqualifying those who are salaried and among the highest 5 percent of employees or among the seven highest-paid employees.
The bill also allows companies to deny if “the denial is necessary to prevent substantial and grievous economic injury to the employer’s operations.”
The extent of providing benefits and making companies more attractive to millennial and younger work forces has been an ongoing topic of conversation in the business community.
Despite the concerns expressed by the business community that this new law could hurt the state’s competitive advantage — it is one of less than a half-dozen states that has such a law — Murphy said Tuesday that the pile-up of worker-related laws in the past year have taken responsible approaches.
“The entire minimum wage package, regardless of what runway you are on, is over a number of years,” he said. “In fact, there is a carveout for small businesses in this as well. It’s a very small tax paid by employees in the state, and that tax gets pinned to how endowed the program is, depending on how many people participate in it.
“The fact of the matter is, the bigger picture is … stronger, more secure middle-class working families in this state, the better it is for them and the better it is for the folks that employ them. There is a confidence, there is an increase in productivity.”
Assembly Speaker Craig Coughlin (D-Woodbridge) echoed Murphy’s comments.
“As we move to make New Jersey more affordable and resources more accessible, paid family leave will play an instrumental role in improving the lives of workers and building a future for themselves and for their kids,” he said.
Egenton said the business community doesn’t disagree in its entirety, but that the state is running ahead with new things to fund without working on new revenue sources.
“We’ve done the fairer economy. Where is the stronger economy?” he said. “If you don’t have strong economic conditions and money being pumped into the general treasury … that side pays for the fairer. If you don’t have a strong economy, the fair is probably going to suffer for it because these things cost money to run.
“There’s got to be a point in time where you have got to slow down … because how many more revenue sources are really left out there?”