(TRENTON) — Legislation sponsored by Assemblyman Paul Moriarty to help both New Jersey businesses and workers avoid layoffs was approved Monday 75-1-2 by the Assembly.
The bill (A-3818) is designed to encourage employers who must reduce their employees’ work hours because of economic conditions to avoid layoffs by sharing the remaining work.
That would be achieved by permitting, under certain circumstances, a full-time employee to receive unemployment benefits when the employee’s weekly work time is reduced by 10 percent or more. The bill also permits the employee to attend an approved training program while receiving those benefits.
Moriarty issued a multimedia package Monday discussing the benefits the legislation would provide to employers and employees.
“This a creative and unique approach to helping New Jerseyans stay on the job,” said Moriarty (D-Gloucester/Camden). “Anything we can do to avoid layoffs is a good thing, and this is a way for both workers and businesses to benefit while keeping people off full-time unemployment. This is the sensible and decent thing to do for hard-working New Jerseyans and the businesses that employ them.”
The bill provides that an employer of at least 10 full-time non-seasonal employees may provide a shared work program if approved by the Department of Labor and Workforce Development.
The program may be approved for one year with annual renewals upon request.
“Job creation and economic development needs to be our priority,” Moriarty said. “We can approach that goal in many ways, and this is a new way to keep people employed and give them the financial security while providing stability to businesses working their way through this difficult economy.”
The employer is required to sustain existing fringe benefits levels, not to hire additional part-time or full-time employees or make unreasonable revisions of workloads; to provide information needed to monitor compliance and to certify that if a labor union represents the employees, it has agreed to the terms of the program.
Under an approved program, an employee is eligible for “short-time” unemployment benefits if:
- The employee’s weekly work hours are reduced at least 10 percent from normal full-time hours;
- The employee would be eligible for regular unemployment benefits during the week if the employee was entirely unemployed; and
- The employee is available to work normal full-time hours.
Short-time weekly benefits paid to an eligible individual would be equal to the individual’s weekly benefit rate multiplied by the percentage of reduction of his wages for the week.
The benefits are limited to 26 weeks during a benefit year, but the weeks may be nonconsecutive. No person may receive both short-time benefits and regular unemployment benefits during the same week. The combined total of regular and short-time unemployment benefits for an employee during a benefit year is limited to the maximum amount of regular unemployment benefits allowed.
All short-time benefits are charged to the account of the employer that provides the shared work program.
The bill requires the Commissioner of Labor and Workforce Development, three years after the effective date of this bill, to submit a report to the Legislature assessing the implementation of the bill’s provisions and their impact on the State Unemployment Compensation Fund, evaluating the effectiveness of shared work programs approved by the division and making any recommendations for appropriate legislative or administrative action necessary to further the purposes of this bill.
The bill will be referred back to the Senate for more consideration.
The multimedia package consists of a video of Assemblyman Moriarty discussing his legislation and audio and a transcript of same.
The audio file is available upon request.
A transcript of comments from Assemblyman Moriarty is appended below:
Assemblyman Paul D. Moriarty (D-Gloucester):
“This bill gives employers an option to avoid layoffs. So, instead of laying off people because work is slow, instead, you could reduce their hours and they could collect partial unemployment.
“I don’t think that this would really put a strain on the unemployment insurance fund because, let’s say you were going to lay off ten people out of a staff of 100, well those people would be collecting full unemployment. If you’re reducing everyone’s work by 10 percent and then those people are eligible to collect — but only a portion — it probably works out to be the exact same amount of money, so it should be a wash.
“This is not a radical new idea. Twenty-two other states actually have something similar to this work-share program. And, according to the Wall Street Journal, the State of Rhode Island last year avoided 10,000 layoffs by using this type of legislation.
“So, you know, as far as an employer goes, I think that they would find this beneficial because you don’t have to lay anybody off, you just reduce hours, and then when business picks up, you can go back to regular hours — you don’t have to retrain new people for the jobs that would have been eliminated under the other option.”