New Jersey Labor & Employment Legislative Update

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Seyfarth Synopsis: The final day of the 2020-2021 New Jersey legislative session was January 11, 2022, which meant that by the end of business on January 18, 2022, Governor Murphy was required to sign, veto, comment on, or pocket veto all approved legislation. The legislature was very busy over the two-year term introducing 11,429 bills of which a total of 616 were signed into law. As the session closed, a host of legislation, some of which significantly impacts employers of all types and sizes across the Garden State, became law. This update summarizes some of those recently enacted laws, some that were passed over, and others that may be on the horizon.

Workers’ Compensation Coverage Expanded to Employer-Provided Parking Areas
A-6195/S-771 Link

This law was first introduced to the legislature as the year drew to a close on December 9, 2021, and took effect upon the Governor’s signing on January 14, 2022.

The new law generally expands workers’ compensation coverage to employer-provided parking areas. More specifically, the bill amends the New Jersey Workers’ Compensation Law to provide that, where an employer provides or designates a parking area for use by an employee, workers’ compensation coverage commences “when an employee arrives at the parking area prior to reporting for work and shall terminate when an employee leaves the parking area at the end of a work period.” Further, if the parking area is separate from the place of employment, the employee would be considered to be in the course of employment while travelling directly to and from the parking area and workplace. Previously, the Workers’ Compensation Law considered employment to run from when an employee arrives at the workplace to when the employee leaves the workplace. Thus, an employee who suffered an injury while travelling between an employer’s parking area and the workplace was generally not covered by workers’ compensation.

Prevailing Wage Rates for Longshoremen
A-4562/S-1053 Link

This new law establishes prevailing wage rates for longshoremen employed at “waterfront facilities” in the State, to be determined and established by the Commissioner of Labor and Workforce Development. The bill defines the “applicable waterfront prevailing wage rates” as the rates set by collective bargaining agreements with waterfront employees in the Port of New York District.

Under the law, waterfront employers (defined as an operator of a waterfront facility, stevedore, or carrier of freight by water who employs longshoremen at a waterfront facility) are required to keep accurate wage records for 2 years following payment of wages, and make them available to the Commissioner, any public body that “owns, administers or provides financial assistance to the waterfront facility where the longshoremen are employed,” as well as “any labor organization representing longshoremen working at that waterfront facility or other waterfront facilities in the State.” Waterfront employers will also be required to post the prevailing wage rates for each job classification as determined by the Commissioner in a “prominent and easily accessible place at the site of work.”

The law also affords the Commissioner broad regulatory authority to conduct investigations and audits to ensure compliance with the law, administer the collection of unpaid wages to employees, impose criminal and administrative penalties, and place an employer “on a list of waterfront employers barred for employing longshoremen in any waterfront facility” for up to 3 years. While on such list, the employer is prohibited from employing longshoremen at any waterfront facility. The law also creates a private right of action for longshoremen paid less than the applicable prevailing wage rate, or who suffer a retaliatory discharge or other discrimination to recover wages owed plus attorneys’ fees and reinstatement.

Lastly, waterfront employers in the State, except for ones located in the Port of New York district, will be required to register with and pay certain annual fees to the Commissioner. Such employers will be required, as a condition of receipt of any financial assistance from any public body, submit to the public body the employer’s “certificate of registration and the certificates of registration for all known subcontractors who are waterfront employers.”

This law passed in the Assembly (62-11-3) and Senate (25-11) on December 20, 2021, and is scheduled to take effect on the 180th day following enactment, or July 13, 2022.

School Report Cards to Include Number of Mental Health Professionals and School Safety Specialists
A-4838/S-2811 Link

First introduced on June 9, 2021, this new law requires annual school report cards to include: (1) the number of mental health professionals, including school psychologists, school counselors, social workers, student assistance coordinators, and other mental health professionals, and the ratio of students to the total number of mental health professionals; and (2) the number of school safety specialists. The law passed unanimously in both the Assembly and Senate on December 20, 2021, and went into effect on January 14, 2022. The law will apply to the first school report card issued for the first full school year following the date of enactment.

Amendments to the NJ WorkAbility Program and Personal Assistance Services Program
A-5262/S-3455 Link

This bill broadens eligibility for the New Jersey WorkAbility Program, which expands Medicaid eligibility to help employed individuals with permanent disabilities earn a living, in four main ways. First, the new law changes the age eligibility limits from 16 to 65 years old, to anyone older than 16 years old. Second, the law requires the premium contribution for program participants to be solely based on the applicant’s earned and unearned income, and not that of the applicant’s spouse. Third, the previous income eligibility limit of 250% of the federal poverty level is eliminated and a qualified applicant will not be subject to any eligibility requirements concerning their earned or unearned income or that of their spouse. Fourth, an eligible applicant will remain eligible for Medicaid for up to one year if the applicant loses their job through no fault of their own.

The bill also amends the Personal Assistance Services Program, which provides up to 40 hours per week of non-medical personal care assistance to individuals with permanent disabilities who work, seek educational advancement or volunteer for at least 20 hours per month, by removing the upper age limit and allowing anyone over age 18 to qualify for services.

This new law passed unanimously in both the Assembly and Senate on December 20, 2021, and took effect immediately upon Governor Murphy’s signing on January 14, 2022, but remains “inoperative until the Commissioner of Human Services receives any federal approvals following the submission of applications for State plan amendments or waivers.”

Certain Commercial Fishermen Exempt from Unemployment Compensation
A-5531/S-3501 Link

First introduced to the legislature on December 13, 2021, this bill exempts certain commercial fisherman from receiving unemployment insurance benefits and paying unemployment insurance taxes. More specifically, any “services provided by a commercial fisherman whose compensation is comprised solely of percentage of fish caught or a percentage of the proceeds from the sale of the catch” are now exempt from the Unemployment Compensation Law.

This law passed unanimously in both the Assembly and Senate on December 20, 2021, and took effect immediately upon Governor Murphy’s signing on January 14, 2022.

Real Estate Brokers and Salespersons as Independent Contractors
A-6206/S-4260 Link

In 2018, Governor Murphy signed the “Brokers Act,” which generally provided that the relationship between a broker and broker-salesperson could be considered either an employment or contractor relationship. The Brokers Act has historically been applied beginning on August 10, 2018.

The new law, first introduced in the legislature on December 6, 2021, seeks to reaffirm the legislature’s intent as stated in the Broker’s Act and to retroactively enforce past written agreements regarding the relationship between a broker and broker-salesperson. The law provides: “[i]f a current or previously written agreement exists or existed between the broker and the broker-salesperson or salesperson that defines, sets forth, identifies, or provides that the broker salesperson or salesperson is or at any time has been an independent contractor of the broker, the broker-salesperson or salesperson shall be deemed to be or have been an independent contractor during the period in which the agreement is or was effective and shall not be classified as an employee for any purpose under any law, rule, or regulation for that period of time.” However, the individual would still need to meet the test outlined in the New Jersey Unemployment Compensation law to be deemed a contractor.

On January 10, 2022, Governor Murphy conditionally vetoed the law’s initial draft to, among other things, narrow its scope to apply solely to real estate brokers and broker sales-persons, and prevent the law from being used by “other employers in the State to misclassify workers.”

As amended, the bill passed unanimously in both the Assembly and Senate (38-0) on January 10, 2022, and took effect upon Governor Murphy’s signing on January 14, 2022.

Employer Use of Tracking Devices in Employee Vehicles
A-3950/S-3180 Link

This bill initially sought to impose civil and criminal penalties on employers who use a tracking or electronic communications device in a vehicle operated by an employee to track the employee’s movement. Specifically, the law sought to classify it a fourth degree crime punishable up to 18 months in prison and/or a $10,000 fine where an employer knowingly uses a tracking or electronic communications device in a non-employer provided vehicle used by an employee without the employee’s written consent. If the vehicle is provided by the employer, the crime was to be ratcheted down to a disorderly persons offense for the first and second violations (thereafter a fourth degree crime). The bill solely provided for civil penalties ranging from $1,000 for the first violation to $2,500 for each subsequent violation by an unknowing employer.

The bill was first introduced in the legislature on April 13, 2020. After it passed both the Assembly (49-26-0) and Senate (24-13), Governor Murphy conditionally vetoed the bill to, among other things, remove the criminal penalties and application to State and local government employers, and tighten the original draft’s broad coverage. As stated in his Conditional Veto, Governor Murphy expressed concern that the draft inadvertently covered “an employer calling an employee on a cell phone furnished by the employer…My recommendations protect against such an outcome by clarifying that the bill’s provisions apply only to devices that are specifically designed or intended to be used for the purpose of tracking employees.”

As revised, the bill solely makes it a civil penalty for an employer to knowingly use a tracking device in a vehicle used by an employee - personal or otherwise - without first providing written notice to the employee of $1,000 for the first offense and $2,500 for each subsequent offense, collectible by the Commissioner of Labor and Workforce Development. “Tracking device” is defined as “an electronic or mechanical device which is designed or intended to be used for the sole purpose of tracking the movement of a vehicle, person or device but shall not include devices used for the purposes of documenting employee expense reimbursement.”

The bill expressly states that it is not meant to supersede any regulations governing interstate commerce “including, but not limited to, the usage of electronic communications devices as mandated by the Federal Motor Carrier Safety Administration.”

The revised bill passed both the Assembly (51-25-0) and Senate (30-3) and is scheduled to take effect on the 90th day following enactment, or April 18, 2022.

Pocket Vetoed

Golf Caddies as Independent Contractors
A-6033/S-4194 Link

First introduced in the New Jersey legislature on November 15, 2021, this bill proposed to classify golf caddies as independent contractors instead of employees, and leave them uncovered by employment laws. The bill easily passed through the Assembly (72-0-2) on December 20, 2021, and Senate (35-0) on January 10, 2022, but was “pocket vetoed” by Governor Murphy on January 18, 2022. The pocket veto means that the law must go through the entire legislative process again.

The proposed law would have classified any person who “performs caddie services for a fee or other compensation on a golf course” as an independent contractor who is exempt from State employment laws, specifically: the Unemployment Compensation Law, Temporary Disability Benefits Law, the New Jersey Gross Income Tax Act or other applicable tax laws, the Workers’ Compensation Law and the New Jersey State Wage and Hour Law.

Recently Enacted

Hiring Preference for Workers Injured at Work
A-2617/S-2998 Link

Signed and made effective on September 24, 2021, this amendment to the New Jersey Workers’ Compensation Law requires employers with 50 or more employees to provide a “hiring preference” to any employee who was injured in a job-related injury and has reached “maximum medical improvement” where the worker cannot return to their former job with the employer. An employee reaches their “maximum medical improvement” when additional medical treatment will not improve their work-related injuries. The amendment requires an employer to afford the employee a preference for any of the employer’s existing and open positions for which the employee can perform the essential functions. Employers are not required to create a new position or remove a current employee from an existing position in order to accommodate the injured worker.

On the Horizon

Labor Harmony Agreements in Covered Retail or Distribution Projects
A-4630/S-577 Link

Assembly Bill No. 4630, which was first introduced in the legislature on September 14, 2020, requires the State, or any other “public body,” to include a labor harmony agreement as part of any contract it enters into with a contractor in connection with “covered project” in which it has a “proprietary interest” as a financier, investor, lessee, lessor, operator or owner of the project or its property or facilities of the project, as a provider of financial support to, or receiver of revenue from, the project.

“Public body” is defined broadly in the bill to mean: “the State of New Jersey, any of its political subdivisions, and any authority, instrumentality, or agency of the State or of any of its political subdivisions, or any other entity authorized to conduct economic development activity on behalf of a public body.”

“Covered project” is defined to mean a “project undertaken pursuant to an agreement entered into after the effective date of this act between a public body and a contractor in which: a. one or more retail establishments or distribution centers are part of the project; b. the public body has a proprietary interest in the project or in a retail establishment or distribution center in the project; and c. the project includes at least one retail establishment which will have more than 10 employees, or at least one distribution center which will have more than 20 employees.”

The bill allows a public body to enter into a contract without a labor harmony agreement only where it determines, after soliciting input from any involved labor unions, “that a covered project would not be able to go forward if a labor harmony agreement is required.” The determination must be put into writing and submitted to the New Jersey Commissioner of Labor for a public finding within 15 business days. The bill does not apply to construction work undertaken in connection with a covered project.

The labor harmony agreement would apply for 5 years after the covered project becomes operational and apply to successor contractors who replace an original contractor during the time in which the public body continues to have a proprietary interest in the project.

The initial version of the bill was conditionally vetoed by Governor Murphy on November 8, 2021, to increase the employee threshold of covered retail establishments from 10 to 20 employees. In his Conditional Veto, Governor Murphy applauded the bill’s sponsors for promoting his shared goal of “protecting reasonable access for labor unions to organize and encouraging amicable labor-management relationships.” The revised version is expected to pass, at which point it would be effective 90 days after enactment.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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