WRITTEN TESTIMONY ON BEHALF OF THE ERISA INDUSTRY COMMITTEE (ERIC) REGARDING ASSEMBLY BILL 1827
BEFORE THE NEW JERSEY SENATE BUDGET AND APPROPRIATIONS COMMITTEE
The ERISA Industry Committee (“ERIC”) appreciates the opportunity to submit written testimony for Assembly Bill 1827 (“A1827”), which would provide paid sick leave to employees in New Jersey. ERIC is the only national association that advocates exclusively for large employers on health, retirement, and compensation public policies at the federal, state, and local levels. ERIC speaks in one voice for its members who already meet or exceed the requirements provided for under A1827.
ERIC recognizes the importance of providing paid sick leave to employees and the state’s desire to ensure the care and well-being of its workers and their family members. We support increasing access to paid sick leave, but believe it should be accomplished in a manner that does not hinder employers who are already providing quality paid leave policies. Large employers, including ERIC’s members, have been providing generous paid sick leave policies to thousands of workers across the country for years. ERIC seeks to enhance our members’ ability to provide consistent, uniform paid leave policies by advocating in favor of laws that enable employers to retain flexibility in designing their policies.
ERIC supports provisions of A1827 that lessen the patchwork and burdens on large employers, such as preempting “any ordinance, resolution, law, rule, or regulation regarding earned sick leave” that has been enacted by a county or municipality. Additionally, ERIC supports A1827’s recognition of employers’ existing policies and deeming them in compliance with this bill should they meet applicable accrual and use thresholds. That being said, the major issue ERIC has with A1827 is the mandate to carryover or “carry forward” unused earned sick leave at the end of a benefit year.
When large employers are forced to carryover an employee’s unused leave, it has the potential to impact the total leave package the employer currently provides. Paid sick leave is traditionally contemplated alongside and is meant to dovetail short and long-term disability plans. Since a majority of large employers that frontload leave do so without carryover because of the link to short and long term disability, the current draft of A1827 would force a major revamp of employee benefit plans thereby negatively impacting employees. The better alternative is connecting carryover with the frontloading of leave, which A1827 permits. When employers are able to frontload leave without carrying over an employee’s unused leave, it creates a benefit on both sides. Employees benefit from being able to use leave on an as-needed basis, and imposes no administrative burden on employers at the end of the benefit year. A1827, as currently amended, presents no benefit to employers should they decide to frontload leave versus allow it to accrue over the benefit year. No matter which option they choose, an employee is still eligible to have unused earned leave carryover or receive an equitable payout. If New Jersey wishes to provide paid sick leave to employees, it should do so in a way that aides employers in the process. Most states have recognized that allowing for frontloading without mandating carryover still provides employees with adequate amounts of leave and is a benefit to both employees and employers.
ERIC would further request that the length of time that employers must retain records be lowered from five to three years, as it is the average duration among states and cities that have paid sick leave laws; and, narrow the definition of “family member” as it is broad in comparison to most other states and localities. The consensus or common theme among most laws is to define family member as a child, spouse, parent, legal guardian, grandparents, and grandchildren of the employee only.
If you have any questions concerning our testimony, or if we can be of further assistance, please contact Bryan Hum at (202) 789-1400 or bhum@ERIC.org.
Senior Associate, Retirement & Compensation Policy