On October 27, the Assembly Labor Committee voted 6-3 in favor of advancing A2354 to the full Assembly for a vote. The bill would require New Jersey employers to provide employees with paid sick leave.
NJCJI joined the broad coalition of pro-business entities opposing the bill. While other opponents testified on the broader implications this bill will have on the state’s economy, NJCJI focused on the hidden liability risks this bill poses.
“As drafted, this paid sick leave bill would create unprecedented liability for New Jersey’s employers and make NJ the only state where an employee can sue over the paid sick leave requirement,” said NJCJI President Marcus Rayner.
Under A2354, 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 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.
Disputes over regulatory mandates such as paid sick leave can be resolved more efficiently through agency actions, and more fairly by removing one-sided presumptions. Putting enforcement in the hands of the court may lower the bill’s fiscal note, but it is still a costly policy choice for employers and consumers.
Contact your Assembly members today and let them know that when it comes to the liability risk included in the paid leave legislation, the cure is worse than the disease.
If you have questions about this legislation, or need assistance contacting your legislators, please contact a member of the NJCJI team.