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Sumter, Benson, Vainieri Huttle, Houghtaling & Wimberly Bill Requiring Companies that Offshore Jobs Out of State to Return State Aid Advanced by Assembly Panel

In an effort to bring jobs to New Jersey, legislation sponsored by Assembly Democrats Shavonda Sumter, Dan Benson, Valerie Vainieri Huttle, Eric Houghtaling and Benjie Wimberly to require employers that offshore call center jobs overseas to return any state aid or business incentives they may have was approved Thursday by the Assembly Labor Committee.

“Outsourcing jobs contributes to unemployment which hurts the economy,” said Sumter (D-Bergen/Passaic). “These incentives are meant to support businesses that are committed to the state. Moving jobs overseas threatens our economy. This bill helps protect our investment and economic vitality.”

The bill (A-1992) would require that any employer relocating a call center from New Jersey to one or more foreign countries must notify the Commissioner of Labor and Workforce Development, and return the value of any direct or indirect state grant, guaranteed loan, tax benefit, and any other financial support provided by the state that was not used. An employer that violates this requirement would be subject to a civil penalty of up to $7,500 for each day the violation continues.

American companies have embraced the practice of exporting call center jobs as a way of reducing labor costs. Over the past decade, the U.S. has lost more than 200,000 call center jobs, according to U.S. Bureau of Labor Statistics data. These jobs are often sent to the Philippines, India, Mexico, Dominican Republic, Costa Rica, Honduras and other developing nations.

“These companies transfer business functions to developing countries because they can take advantage of skilled foreign workers, while paying them a fraction of U.S. worker wages,” said Benson (D-Mercer/Middlesex). “This not only hurts our workers, but jeopardizes the level of service that consumers get.”

The bill defines a “call center” as a facility or operation where workers receive incoming telephone calls, emails, or other electronic communication to provide customer assistance or other service. The bill defines “employer” as a business entity that employs 50 or more full-time workers or 50 or more workers at a call center for at least 1,500 hours per week, excluding overtime hours.

“Moving jobs to other countries so they can pay lower wages while benefitting from state resources is a slap in the face to taxpayers,” said Vainieri Huttle (D-Bergen). “These companies should not be able to take advantage of our financial support while they actively keep jobs away from our workers.”

“As American companies outsource call center jobs, communities lose. In many communities, the loss of a call center means the loss of a pillar of the local economy,” said Houghtaling (D-Monmouth). “Companies that choose to take jobs out of the state should not be able to benefit from the state’s generosity.”

The bill also requires any employer with a call center in New Jersey to maintain a staffing level capable of handling no less than 70 percent of customer volume of telephone calls, emails, or other electronic communications. If the staffing level falls below this required amount, the employer is required to notify the commissioner.

“Simply put, the goal of this bill is to create jobs for our residents and to avoid eliminating jobs,” said Wimberly (D-Bergen/Passaic). “This piece of legislation not only would incentivize call centers to stay in New Jersey, it would insist that employers always have the proper amount of employees on staff at all times which would save, as well as increase, jobs in our state.”

The bill would require the commissioner to maintain a list of all employers that give a notice as required by the bill and update the list on a monthly basis. An employer will remain on the list for 36 months, at most, after giving the required notification. The bill also requires the commissioner make this list public. An employer’s being on the list would not prevent the employer from receiving, or require the employer to remit, training grants or other employment assistance to members of groups with particular need of training or other assistance. This includes veterans, minority groups and women.

Lastly, the measure provides that a state department or agency, in making or awarding a contract for call center services, will grant a preference to qualified businesses located in the state and employing residents of the state.