Paid Leave Clears A Big Hurdle

Despite small-business pleas, the bill goes to the Senate

NJBIZ — Monday, February 12, 2007

BY Scott Goldstein

TRENTON — Business at Faye Hart's nine-employee insurance and financial services agency in Bordentown suffers when a worker takes extended leave to care for a sick family member.

"For small employers, there is no cross-training, no job shadowing to prepare for this type of situation," says Hart, owner of the Hart Agency. "Small business cannot afford to have backup training for all positions."

Her comments came last week during a Senate committee hearing on a controversial bill (S-2249) that would make New Jersey the second state to offer paid family leave, following California's lead. The bill would cover companies including those with 50 or fewer employees, which are exempt from current state law requiring business to provide up to 12 weeks a year of unpaid family leave.

Despite protest from Hart and a half dozen other small-business owners, the bill passed the Senate Labor Committee last week and now heads to the full Senate. Supporters of the measure include unions, pro-family groups and a small-business owner who testified last week. An Assembly version of the bill, which has 11 co-sponsors, is still in committee.

Small-business opponents of the bill, which mandates up to 12 weeks of paid family leave a year, said it would encourage more employees to take leave and would deal a particularly hard blow to small companies. But the committee rejected the opponents' appeal to exempt small businesses from the measure.

"We have much opposition to this bill," says Hart. "Not because we don't want our employees to be able to have time to bond with newborns [or] to take care of a beloved spouse, parent, or close family member who is critically ill. We just want the flexibility and control to allow them to do so without jeopardizing our small businesses."

The owners say the bill could hurt workers who take leave since companies may have to replace them with new permanent employees. The bill does not require businesses to reserve jobs for employees on leave.

"When an employee goes out on leave, it's very difficult for me to find temporary, skilled labor in my industry," says Joe Olivo, owner of Perfect Printing in Moorestown. "If I'm fortunate enough to find someone, the cost of training is very high and it's difficult to justify for someone who may only work for two or three months."

He added, "If more employees were to begin taking leave because of proposed legislation, I would run the risk of actually having to turn down new business opportunities because I would not have sufficient resources to complete the work."

But cosponsor Sen. Stephen Sweeney (D-Gloucester), chairman of the Labor Committee, was not swayed. "Arguments that the sky is falling don't hold water," he said, while surrounded by union members and pro-family advocates during a press conference that followed the hearing. "What happens when employees go on vacation? What happens when employees go on pregnancy leave? People who own businesses are creative and they find ways to get by."

Sweeney, who is a union representative for Ironworkers Union Local 399, stressed that the leave would be funded by employees through an additional $1 deduction to the state Temporary Disability Insurance (TDI) fund, which workers already pay into. "This is not a new tax on businesses," he said. "We made it clear in the legislation that employers won't pay a dime."

Sweeney says California workers who have used paid family leave have done so for an average of just two weeks a year. The California law took effect in 2004 and grants up to six weeks of annual paid leave--half as much as the New Jersey bill mandates.

Speaking in favor of the bill was Sheryl Magaziner, owner of the Centerpiece gift shop in Highland Park. She said that paying employees when circumstances require them to take a leave boost morale at her shop. "I won't have to pay [for their leave]," said Magaziner. "The state will pay and it will make employees happy. Customers come back for good service and happy staff means good business."

Workers making the $7.15 minimum wage would pay an additional 28 cents a week under the bill, while those making $94,000 would pay an extra $1.80 per week. According to the measure, the average worker would pay less than a dollar more per week.

"For less than a Starbucks cup of coffee, this is the best social insurance anyone can buy," says Charles Wowkanech, president of the New Jersey State AFL-CIO, which represents tens of thousands of workers.

The measure would continue to allow public and private-sector employees to take up to 12 weeks off per year to care for seriously ill immediate family members and tend to newborns and adopted children. For the first time, however, workers would be entitled to two-thirds of their pay up to a ceiling of $488 per week. Employees who take paid leave would first have to utilize up to two weeks of available sick-leave or vacation time.

Says Sen. Barbara Buono (D-Middlesex), a co-sponsor of the bill: "We have to provide support to workers who do the two most important jobs of all: providing for their families and caring for a loved one. We should not be forced to choose."

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