NJ business groups decry proposal to increase laid-off workers’ perks
New Jersey advocates for the business community are attempting to pump the brakes on legislation that they say would worsen New Jersey's already less-than-friendly business climate if it were to become law.
Still adjusting to new paid sick leave requirements and the signing of a $15 minimum wage, they're hoping employers can be on the winning end of this debate, which touches on severance pay for workers in mass-layoff situations, and how much notice these workers must receive before doors are closed for good.
Under the measure, employers of 100 or more workers would be required to award severance pay — one week for every year of service — when at least 50 workers are getting the ax. Currently, these employers are only forced to award severance pay if they fail to provide 60-days notice.
The bill, sponsored by state Sens. Joe Cryan, D-Union, and Nellie Pou, D-Passaic, also increases the warning period from 60 to 90 days. If an employer doesn't meet the 90-day requirement, each worker would receive an additional four weeks of severance pay.
"We have shared this bill with our members; it is a significant concern," Mary Ellen Peppard, vice president of the New Jersey Food Council, told lawmakers on the Senate Commerce committee.
"These stores have to try to keep themselves open for 60 days when they have diminished sales and they have fewer employees as is," Peppard said. "When you're talking about extending it to 90 days, that's going to be more of a struggle."
Christina Renna, senior vice president for the South Jersey Chamber of Commerce, said the proposals are targeting businesses that most likely are financially unsound. So paying out the proposed severance agreements would be "next to impossible."
"What's going to happen then is that employers are going to move to bankruptcy court, and then the severance is going to be dissipated anyway," Renna said. "So what incentive do employers have to give advanced notice?"
The New Jersey Business & Industry Association said the legislation would deter companies from even considering New Jersey as a place to do business.
"If enacted, this proposal would make our business climate even less competitive, as it comes after the enactment of a series of tax increases and expensive mandates imposed on employers during the past year, including a higher corporate business tax, higher state income tax, new paid sick leave requirements and the signing of a $15 minimum wage," said NJBIA Vice President of Government Affairs Michael Wallace.
The proposed law is in response to a series of major business closings and bankruptcies where workers were left jobless and without severance compensation, including Toys R Us.
"In the event of corporate losses and bankruptcies, the first people to think of, the first people to protect, must be the employees," Pou said in a news release. "When Toys R Us went under, they left their employees out in the cold with next to no paycheck or lead time to prepare, while the executives divvied up massive bonuses. This is unacceptable and the workers of New Jersey deserve better. They deserve the protections in this bill."
The legislation was advanced by the Senate Commerce committee in early February and is waiting for action by the Senate Budget and Appropriations committee.