The Senate Labor Committee advanced legislation Dec. 1 to establish employment protections for certain service employees during changes of ownership.
Senate Bill 2389, which was released from committee by a 3-2 vote, would require any employer that enters into a service contract or subcontract with service employees to undertake certain actions to protect them in the event of the transfer of a service contract from one employer to another.
The sponsors, state Sens. Troy Singleton, D-7th District, and Andrew Zwicker, D-16th District, say the measure improves employment protections for these employees.
Singleton
“When ownership of service contracts changes, employees and their needs can often be forgotten. It is important to ensure that employees have job stability, even in transitions of management,” said Singleton. “We are coming off of the heels of a pandemic that catalyzed mass layoffs across the board. This bill will protect employees and their jobs, easing any anxiety that may arise when ownership changes, and will lay out the provisions that will be afforded to service employees.”
Zwicker
“Statewide, New Jersey workers employed by building-service contractors have no legal right to keep their jobs if the contractor changes and the incoming contractor decides not to retain the existing workforce,” said Zwicker. “This legislation would make service employee contracts more transparent to employees and make certain that contractors ensure the stable transfer of service employees.”
Under the bill, at least 15 days before terminating or transferring any service contract, an outgoing employer would be required to notify a succeeding employer of the name, date of hire, and job classification of each service employee and the employee’s collective bargaining representative. The outgoing employer would also be required to provide notice of the impending transfer, including the contact information of the new employer and the date by which the employee would be required to accept the new offer of employment.
The flip side
Ahead of Thursday’s Senate Labor Committee vote, the New Jersey Business & Industry Association (NJBIA) voiced its opposition to the measure, saying that employers should have the choice to hire who they see fit based on financial need, job performance, experience or other factors in order to make sound business decisions.
“There are already safeguards in place to protect workers in the event that they lose their job, such as collective bargaining, unemployment insurance and the state and federal mass layoff protections that can protect employees during a change of service contract if they are not offered employment by a new contractor,” said NJBIA Director of Government Affairs Alexis Bailey. “Additionally, service contract vendors already have the opportunity and often do freely choose to interview and hire the workers employed under previous contracts if it would be the most advantageous for their business.”
The NJBIA pointed out that the measure will impact a wide variety of employers and facilities.
“These broad definitions make the impact of this mandate so expansive that it will unnecessarily impact employers in large swaths of the state economy,” Bailey explained.
Bailey added that the bill follows the recent enactment of other laws mandating the retention of employees in both the hotel and health care industries.
“The Legislature must not continue this trend of striking at-will employment and mandating collective bargaining through statute,” said Bailey. “Legislation such as this usurps managerial decision making, increasing the regulatory burden of doing business and harming our overall competitiveness in New Jersey.”
Iselin-based Provident Bank is out with the results of its 2022 National Labor/Staffing Shortage Survey, which comes at a critical time as businesses face a number of challenges, especially on the hiring front.
The findings, released Oct. 20, reflect feedback from 1,000 hiring managers and department heads, small business owners, recruitment and talent acquisition specialists, and compensation and business managers to determine how businesses are dealing with the consequences of the labor shortage.
The topline and most notable figure shows that nearly 75% of American businesses have been affected by the staffing shortage, as companies big and small struggle to attract and retain talent in a very tight labor market.
Turning down business and cutting back operation hours were among the most cited ways that the trend has affected businesses. Those surveyed also noted that a high turnover rate and the inability to fill crucial roles added more stress to business operations.
Some of the common themes as to why employees were leaving their jobs included: low salary, the inability to work from home, uncompetitive benefits, child care issues and burnout.
More than 33% in the survey noted that, in an effort to retain or attract talent, their company revised perks and benefits — such as tuition assistance, enhanced paid time off, child care reimbursement, additional paid sick and holiday leave, 401(k) matching, and sign-on bonuses.
Some of the common themes as to why employees were leaving their jobs included: low salary, the inability to work from home, uncompetitive benefits, child care issues and burnout. – DEPOSIT PHOTOS
Other key findings include:
69% of businesses have had candidates decline opportunities because of better offers; 79% of that group have attempted to combat this issue and remain competitive by raising salary offerings by up to 20%.
40% of survey respondents were small business owners — of that group, 60% said their company has been impacted by staffing shortages.
85% of individuals employed by a business with more than 101 employees reported impacts due to labor shortages.
The most common employee perks implemented to attract and retain employees included wellness stipends, casual dress code and extended maternity/paternity leave.
The importance of hybrid and work from home options were a common theme among responses, with 57% reporting their company instated either or both options to attract and/or retain talent.
“Organizations that are placing the employee experience at the center of their business strategy are benefitting from improved retention rates and the ability to attract talent during the current job market,” said Provident Bank President and CEO Anthony Labozzetta.
The state opted not to continue a slew of federal unemployment benefits past Sept. 4 that hundreds of thousands of New Jerseyans counted on, and Gov. Phil Murphy said he had hopes that the move could at least play some kind of role to reverse months of labor shortages.
“I hope it helps address the labor market, the challenges that we had,” he said during a remotely-held COVID-19 press briefing on Sept. 15. “I personally think it would have perhaps a modest impact on that.”
Possibly the most notable federal COVID-related unemployment benefit was an added $300 in weekly relief, which businesses and conservative lawmakers contend was the sole driver of hiring shortages.
Since the late spring, businesses in the restaurant, hospitality, retail and entertainment industries have complained about hardships filling their ranks with enough workers to staff reopenings. Many had to reduce operations or hours – or raise prices – especially along the Jersey Shore, which is heavily dependent on summer tourism.
The effects of those moves were muted, according to a joint study prepared by researchers at Harvard and Columbia universities, the University of Massachusetts Amherst and the University of Toronto. States that cut off the benefits saw their employment rates jump 4.4% compared to states that kept the benefits.
The study compared 18,648 claims in states that cut off the benefit and those where it is still in place using data from late April through August. The researchers found that 7 out of 8 people who saw their benefits cut still did not find employment afterward.
Siekerka
New Jersey Business & Industry Association CEO Michele Siekerka said the hiring shortage was essentially a “perfect storm” of different factors working together and worsened by the added unemployment relief.
“I don’t think it was a big driver to begin with. I think it probably was a factor,” the governor added. “We will see.”
The state’s unemployment rate stands at 7.3%, making it the fifth-highest in the nation. It peaked at 16.6% in April 2020, at the height of the COVID-19 business closures put into place.
When the benefits lapsed, they were relied on by 500,000 New Jerseyans. Another 250,000 New Jerseyans receive benefits under the Pandemic Unemployment Assistance program, which provides aid to non-traditional workers such as freelancers and sole proprietors. And 190,000 people receive a 13-week extension under the federal Pandemic Emergency Unemployment Compensation.
Murphy had the option to continue the benefits by using the $6.2 billion that went to the Garden State under the American Rescue Plan, but said that the price tag would be too steep and the state would quickly burn through the money if it opted for the route.
“[T]aking away benefits does not spur job growth, but it does make it much harder for families to put food on the table,” Vineeta Kapahi, an analyst at the progressive think tank New Jersey Policy Perspective, said in an August statement. “Too many workers continue to face the impossible choice of exposing themselves to COVID-19 or losing income, while many others are struggling to juggle caregiving responsibilities with work.”
Gillian’s Wonderland Pier. – OCEAN COUNTY REGIONAL CHAMBER OF COMMERCE
In the next week, one of the most intensely debated unemployment benefits – the $300 weekly bonus from the federal government – is set to expire. Other benefits that expire around the week ending Sept. 6, include a 13-week extension on jobless benefits, and a federal unemployment insurance program for non-traditional workers hit hard by the pandemic, such as sole proprietors, freelancers and independent contractors.
Business owners and conservative lawmakers argue that the lapse in that added money could alleviate labor shortages, especially in the restaurant industry. “We are basically desperate for the unemployment to end so that we can start to receive job candidates again,” said Travis Semblewski, owner of Vic’s Italian Restaurant in Bradley Beach, a Shore town. “Even though it’s going to occur after summer, we still have positions to fill.”
But economists and state leaders have cautioned that the labor shortage has several causes. And any policy decision will likely take months to have any kind of effect. “It was one of many contributors to this challenge,” Gov. Phil Murphy said during a regular COVID-19 press briefing on Aug. 2. Workers seeking to “up-sell” and “up-skill,” or leave a previous place of work after a negative experience, Murphy said, have also fueled the shortage.
Regina Egea, who heads the right-leaning think tank Garden State Initiative, pointed to New Jersey’s particularly high unemployment rate, 7.3%, saying it meant the state still has considerable work to do. “Nearly every retailer has ‘Help Wanted’ signs and frequent reduction of hours of operation due to labor shortages,” she said in an email.
Ending the benefits
New Jersey is among about half the states that have not opted out of the $300 per week, which is outlined under what’s called the Federal Pandemic Compensation supplement. Twenty-six states, all led by Republicans, have cut off the weekly check in a bid to end the hiring problems.
The effects of those moves were limited, according to a joint study prepared by researchers at Harvard and Columbia universities, the University of Massachusetts Amherst and the University of Toronto. States that cut off the benefits saw their employment rates jump 4.4% compared to states that kept the benefits.
The study compared 18,648 claims in states that cut off the benefit and where it is still in place, using data from late April through August. The researchers found that even out of eight people who saw their benefits cut still did not find employment afterward.
Kapahi
“[T]aking away benefits does not spur job growth, but it does make it much harder for families to put food on the table,” said Vineeta Kapahi, an analyst at the progressive think tank New Jersey Policy Perspective. “Too many workers continue to face the impossible choice of exposing themselves to COVID-19 or losing income, while many others are struggling to juggle caregiving responsibilities with work.”
But Semblewski said he heard from many employees who felt that “the benefits are too good to pass up and that they want to return when they expire.” “We look forward to the impending expiration of the expanded unemployment benefits as well as regular unemployment,” he said. “You will see a surge in the labor force once it all expires.”
Roughly 500,000 New Jerseyans are collecting the added $300 per week. Under federal guidance, states are allowed to use funds from the American Rescue Plan to extend the unemployment programs past the Labor Day expiration. Murphy has not said whether New Jersey would take that route. His office along with the New Jersey Department of Labor and Workforce Development – which runs the program – have not responded to multiple emails seeking comment.
Other factors
Siekerka
New Jersey Business & Industry Association CEO Michele Siekerka said the hiring shortage was essentially a “perfect storm” of different factors working together and worsened by the added unemployment relief. Lack of access to child care, for one, is keeping many parents simply unable to get into the workplace, Siekerka said.
Egea agreed that any single policy decision at this point would not be enough to make a dent in the unemployment rate and get more New Jerseyans back to work.
Kevin Brown, New Jersey state director for 32BJ SEIU, which represents thousands of service workers in the state, contended that concerns about worker safety during the pandemic kept people home. “Employers cut corners where they can, and while they may provide some [personal protective equipment], it may not be enough or with adequate frequency,” he said in May as the shortages in workers made headlines nationwide. “There is a labor shortage because some employers are not even paying standard wage, taking away benefits. People can’t work in those conditions.”
In July, the NJBIA issued ten proposals meant to reverse the hiring shortage. Some could be adopted via executive action. Others needed the support of a state Legislature in recess and with all 120 members on the campaign trail.
For one, the state could tighten enforcement of its “available for work” requirement, and open up channels for employers to report potential violations. Access to childcare should be improved and labor laws for teenagers could be loosened so that they could work more hours. In addition, the state could provide a lump sum of the weekly federal relief for those who immediately return to work.
Just before the Independence Day weekend, Murphy signed a bill allowing those ages 16 and 17 to work up to 50 hours a week, though that expires on Sept. 6. And state lawmakers are proposing a series of tax credits to help businesses with the added costs, such as the use of hiring bonuses or increased pay, to hire back workers.
U.S. Rep. Josh Gottheimer, a Democrat from Bergen County, is asking Murphy to use some of the state’s federal aid to pay $500 back-to-work bonuses. Additionally, the proposed New Workers Act in Congress would allow individuals to collect $180 a week in benefits after finding a job.
The delta drag
James Hughes, an economist at Rutgers University, said the delta variant is a significant drag on the national and state economy. Return-to-office plans, necessary for the economic recovery of many communities, have already been delayed past their original September goals.
Hughes
“The economic ecosystem that surrounded offices in Newark, in Jersey City, the restaurants that service daytime workers and the like … was pummeled by the closing down of a lot of white-collar office facilities,” Hughes said. “That’s a source of a lot of jobs that are still lagging behind.” The job reports for July, which reflected steady gains, are “ancient history right now.”
All other indicators “suggest that August, things are slowing down again because of the COVID variant. It’s not derailing growth, but it’s slowing it,” Hughes said.
Still, Hughes suggested that the $300 a month creates spending power necessary to keep the economy moving. In fact, after the added $600 in weekly federal relief lapsed last year, New Jersey State Treasury Officials recorded a drop in sales tax revenue as spending slowed.
The potential effect of renewed restrictions such as reduced capacity, mask requirements or mandated closures is “way too speculative,” Egea said. She and Siekerka both said new restrictions would be unnecessary given the collective knowledge gained about the virus. “I don’t think there would be a need to be shutting down our economy again given the mitigants we have, and the fact that we need to operate within the confines of what we have,” Siekerka said.
The ambitious reopening schedule Gov. Phil Murphy set for May 7 through May 19 generated excitement in the state’s business community. And the pro-labor attitude President Joe Biden has expressed both on the campaign trail and within the Oval Office fueled optimism that employees would be protected as they went back to work.
But the reality has been less compelling. Businesses – especially those along the Shore – have struggled to find workers willing to come back. And the White House has taken months to issue emergency workplace safety requirements surrounding COVID-19, instead relying on voluntary guidelines issued by the federal Occupational Safety and Health Administration.
The labor shortage is a nationwide problem, but it could be particularly acute in New Jersey as the state gears up for the summer tourism season. Economical health here depends on tens of millions of visitors flocking to the beaches. Serving and lodging those people requires a huge labor force.
Business owners claim the added $300 in federal unemployment weekly benefits has encourages potential employees to stay home rather to return to work. A dismal April jobs report, which showed that the U.S. economy added just 266,000 jobs rather than the 1 million that analysts expected, added fuel to that argument.
“We cannot drive the sustained economic recovery New Jersey desperately needs by waiting out the summer and ‘passing’ to the end of the enhanced unemployment insurance benefits, which will come too late in September,” said Michele Siekerka, who heads the New Jersey Business & Industry Association, in a May 10 statement.
Republican-led North Dakota, Montana and South Carolina are dropping the benefits, but Gov. Phil Murphy says there are no similar plans in New Jersey. “Is there some amount of this related to folks still getting their benefits? That is quite possible. I continue to believe the overwhelming amount of folks who are getting benefits are desperately in need of those benefits,” Murphy said at a May 10 press conference. Murphy’s determination to continue the benefits, drew criticism from business owners.
Brown
But Kevin Brown, New Jersey state director for 32BJ SEIU, which represents thousands of state service workers, contended that a lack of worker safety during the pandemic is to blame for keeping people home. “Employers cut corners where they can, and while they may provide some PPE [personal protective equipment], it may not be enough or with adequate frequency,” he said in an email. “There is a labor shortage because some employers are not even paying standard wage, taking away benefits. People can’t work in those conditions.”
Arnold Kamler, chairman and chief executive officer of bicycle manufacturer Kent International, called the notion “hogwash.”
“We spent a lot of money. We have cleaning every single day. We have a very strict mask requirement. I don’t believe that for a second,” he said during a May 11 NJBIA town hall on the state’s hiring problem.
Employers and business groups argue that voluntary compliance is strong – noting that it’s good business to maintain a safe workplace.
Marc Freedman, vice president of employment policy at the U.S. Chamber of Commerce, said in a November interview that businesses, through voluntary guidance, are able to take into account their own best practices and understanding of the workplace.
“The way we look at it, employers are very much on notice that they are required to protect their employees,” he said.
Womack
Michael Womack, head of marketing at the nonprofit New Jersey Manufacturing Extension Program, said that since factories have been considered essential businesses, they’ve had the opportunity to hash out and fine tune their workplace safety policies.
“They’ve been actively working and reworking their lines, shifting production schedules, creating multiple shifts,” he said. That’s meant working with NJMEP to redesign their production lay-outs and production lines to increase space between workers and stagger shifts.
Bill Corvelli, owner of Hapgood’s Restaurant in Mountain Lakes, said his restaurant has undergone a nonstop process of cleanings and sanitization ever since on-premises dining was allowed to resume last June.
“Customers were calling, asking a lot of questions on how we were handling this,” he said during an OSHA online town hall held with several New Jersey and New York businesses on the state’s reopening.
The federal response has been slow. “Federal OSHA was supposed to have issued basic requirements for employers to follow to protect workers. It would be a path to follow for employers, and also give workers protections they can make sure are being implemented. But the standard is not out yet,” said Debbie Berkowitz, a former OSHA administrator during the Obama era, who’s now with the National Employment Law Project.
[S]topping the spread and protecting workers from COVID is the only way to get the economy and our lives back to where we want them to be.
– Mike Levy
Non-essential businesses that had to shut down last spring – many retailers, gyms, malls, casinos, restaurants, entertainment, salons and theaters – have reopened at reduced capacity.
Levy
“Biden has an executive order and in that order it says it’s morally and economically imperative that we ensure the health and safety of our workers” Mike Levy, assistant regional manager for Region 2 of the Occupational Safety and Health Administration, said in a phone interview. “[S]topping the spread and protecting workers from COVID is the only way to get the economy and our lives back to where we want them to be.”
Levy said the state’s own operation, enacted under Executive Order 192 last year, encompasses many aspects “not covered by OSHA standards,” such as social distancing, masking, cleaning and employee health checks.
“New Jersey’s enforcing that and again we work with them. We have a very good working relationship,” he said.
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