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Tuesday, April 08, 2008

New Jersey’s Paid Leave and Higher Costs

Well, they did it. New Jersey state legislators officially passed a paid leave bill for workers. And the Garden State’s governor, Jon Corzine (D), has declared that he will sign the measure.

According to the Associated Press, the measure allows the following:

Under the plan, which is backed heavily by organized labor and opposed by Republicans and business groups, parents could take paid leave anytime in the first year after a child's birth or adoption.

Workers would be allowed to take paid leave to care for a sick relative receiving inpatient care in a medical care facility or under continuing supervision from a health care provider. A health provider could also certify a sick relative needs help at home.

The program would be paid for through a payroll deduction that legislative officials estimate would cost workers $33 per year. Workers who take leave would get two-thirds of their salary, up to $524 per week, with an estimated average weekly benefit of $415.

The AP report went on to note what those opposed had to say:

Opponents liken the payroll deduction to a tax, and they fear it will increase if the program doesn't earn enough money to meet its needs.

"Legislators and the governor seem to think our residents and employers have deep pockets and unlimited resources to fund their bloated bureaucracy, when that is far from the case," said Jim Leonard of the New Jersey Chamber of Commerce.

Businesses face added labor costs as well, as they must hire additional or temporary workers, or suffer due to lost productivity.

The story noted that New Jersey now joins two other states in offering paid leave – California and Washington. The state of Washington’s program is scheduled to start in October 2009, though lawmakers have not figured out how to pay for it yet.

New Jersey already has the worst public policy climate for entrepreneurship and small business among the 50 states, according to the “Small Business Survival Index 2007.” This, of course, will only make matters worse.

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