OPINION: Too much of a good thing

After a year of economic turbulence throughout New Jersey, the state is stepping away from its normally rational approach to paid leave policy. State lawmakers are considering a new paid sick leave bill, Senate Bill 3827, that would create redundant benefits to which employees already have access while placing the unfunded costs of this unnecessary mandate directly on New Jersey businesses.

New Jersey already has some of the most robust paid leave laws in the country. Since 2008, the Garden State has been a leader in paid leave policy, shaping balanced laws that address the needs of today’s workforce while recognizing the economic realities that businesses face. Workers in the state currently have access to multiple paid leave sources, including earned sick leave, paid family leave insurance and temporary disability insurance, to name a few. In early 2020, New Jersey lawmakers bolstered this coverage even further by expanding the state’s earned sick leave law to specifically cover circumstances arising from the pandemic. Because these substantial paid leave policies have been in place, New Jerseyans have had access to the very same COVID-19-specific paid leave proposed by S3827 for well over a year.

Despite this, S3827 would require employers of all sizes to provide their employees with up to 80 hours of supplemental COVID-19 paid sick leave in addition to any paid sick leave already earned by the employee or provided voluntarily by the employer. This new proposed leave would also be applied retroactively to the beginning of 2021, only serving to compound the compliance challenges and increased costs for businesses statewide. While the bill’s intent is notable, it addresses a problem that already has a solution. This supplemental paid leave is just not needed.

Importantly, the unfunded paid leave mandate proposed by S3827 would place the significant costs of providing supplemental benefits squarely on New Jersey employers. The proposed new leave is structured to line up with federal Families First Coronavirus Response Act (FFCRA) standards, which provides federal tax credits to employers with 500 or fewer employees to offset the costs of required benefits. Unlike the FFCRA, S3827 not only expands redundant paid leave requirements to employers with more than 500 employees but fails to provide critical economic relief, forcing vulnerable businesses to cope with this new compliance burden alone when they are already fighting to survive. Therefore, larger employers – those with more than 500 employees – would be left without offsetting financial support from either federal tax credits or state aid.

There has never been a more critical time to support New Jersey businesses already grappling with new pandemic-related paid leave requirements. States like Massachusetts and Maryland have continued to recognize this importance. Both states recently passed legislation that paired supplemental COVID-19 paid leave requirements with direct funding to help employers provide these new benefits. During this crucial period of recovery, the last thing New Jerseyans need is an increase in compliance challenges that could force businesses to close and take critical jobs away from an already exposed economy.

While S3827 is well-intentioned, state lawmakers must recognize the immediate threat that redundant and unfunded mandates like this pose for businesses and workers alike. There is still time for New Jersey legislators to right the course and defeat the proposal. The state can once again lead by example and show that it is possible to create paid leave policies that provide valuable employee benefits without creating counterproductive challenges for businesses already struggling to stay afloat. At the end of the day, S3827 is not the answer and must be opposed.

Aliya Robinson is senior vice president of retirement and compensation policy at The ERISA Industry Committee, a national advocacy organization exclusively representing large employers that provide health, retirement, paid leave and other benefits to nationwide workforces.