There were two items on the Senate’s agenda on Monday that we were keeping a close eye on – paid sick leave and credit checks on employees/potential employees. The paid sick leave bill was ultimately pulled from the calendar, but the credit check bill passed 22-16.
Paid Sick Leave
NJCJI joined a slew of pro-business groups opposing S785. While other organizations focus on the broader implications this bill will have on the state’s economy (see information on this from NJBIA), NJCJI is focused on the hidden liability risks this bill poses.
Under this legislation, an employer who does almost anything related to paid sick leave, including simply informing any person about the availability of paid sick leave, gets a 90 day window during which any adverse employment action they take is presumed to be retaliatory. If an employee files suit during that 90 day window, the burden is on the employer to prove in court that the action was unrelated to the employees’ sick leave-related activity. It is not even clear that reassignments to meet business demands would be lawful under this legislation, since “retaliatory action” is defined to include even an unfavorable work assignments. Under these conditions, employers would have difficulty effectively managing their employees without generating a lawsuit.
The expansive scope of potential liability is compounded by the severe penalties that attach to violations of this legislation. Plaintiffs are entitled to actual damages plus an equal amount of punitive damages, plus attorney fees and court costs. The high cost of litigation, and the financial risk of losing the case, mean many claims would settle immediately, regardless of their merit. These costs are all passed on to consumers.
“We appreciate that the Senate recognized there is still work that needs to be done to improve this bill before a final vote. In no other state where paid sick leave is already in place are employees encouraged to sue their employers to get relief. Putting enforcement in the courts reduces the fiscal note for the state, but it increases the costs borne by employers and employees,” said NJCJI President Marcus Rayner.
Credit Check Legislation
Like so many other bills in the employment law context that have been considered recently, S524 and S1130, are a liability boondoggle disguised as a regulatory mandate. On their face, these bills simply prohibit employers from conducting credit history checks on employees and job applicants. But under the surface, this legislation dramatically increases the liability risk businesses in New Jersey must face since it would encourage employees and job applicants to take non-compliant employers to court. As we have repeatedly said, increasing liability risk is bad for New Jersey’s economy.
The bills were combined in a committee substitute, which passed by a vote of 22-16. The Assembly has yet to take action on this legislation, so we are now closely monitoring that house.
Summer Time is Not Vacation Time for NJCJI
Monday was one of the last days the New Jersey Legislature will likely meet before the fall elections, but that does not mean that we are kicking back to relax until January. We anticipate that the Legislature will convene multiple times between now and then, so we will be monitoring that. But out appellate activity is also keeping us quite busy. Click here to learn more about the cases we are currently involved with.