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

(TRENTON) – Legislation sponsored by Assembly Democrats Shavonda Sumter (D-Passaic/Bergen), Tim Eustace (D-Bergen/Passaic), Dan Benson (D-Mercer/Middlesex) and Valerie Vainieri Huttle (D-Bergen) to require employers that offshore call center jobs overseas to return any state aid or business incentives they have received was released Thursday by an Assembly panel.

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.

“Outsourcing jobs contributes to unemployment which hurts the economy,” said Sumter. “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.”

“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. “This not only hurts our workers, but jeopardizes the level of service that consumers get.”

“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 Eustace. “Companies that choose to take jobs out of the state should not be able to benefit from the state’s generosity.”

“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. “These companies should not be able to take advantage of our financial support while they actively keep jobs away from our workers.”

The bill (A-4158) 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 remit the unamortized value of any direct or indirect state grant, guaranteed loan, tax benefit, and any other financial support provided by the state. An employer that violates this requirement would be subject to a civil penalty of up to $7,500 for each day the violation continues.

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.

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 a period not to exceed 36 months after giving the required notification. The bill would also bar any employer added to the list from receiving any direct or indirect state grant, guaranteed loan, tax benefit, or other financial support from the state for 36 months following the date on which the employer is added to the list. An employer added to this list is also required to remit to the commissioner the unamortized value of any such financial support already provided to the employer.

The commissioner may waive the remittance requirement if the commissioner finds that the requirement would result in a substantial loss of jobs in this state or harm the environment.

Lastly, the bill 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, as set forth in regulations adopted by the commissioner.

The measure was advanced by the Assembly Labor Committee on June 15.