Tag: New Jersey

Pay-to-Play Law on Gov. Christie’s Desk Poses Potential Threat to National Parties

Covington & Burling LLP

A little-noticed sentence in a bill sitting on New Jersey Governor Chris Christie’s desk could, if it becomes law, threaten to curtail the ability of national party committees to raise money from Wall Street and financial industry executives.  The Republican and Democratic Governors Associations, the Republican National Committee, the Democratic National Committee, and the federal congressional party committees could all be impacted.

New Jersey State Investment Council rules prevent the state pension fund from hiring an investment management firm if, within the two years prior, certain executives and professionals at the investment firm made a covered “political contribution or payment to a political party.”  The term “political party” means “any political party or political committee organized in the State” but does not include “a Federal or national campaign committee or a non-State political committee.”

The bill recently passed by the state legislature, however, would change that.  The bill—which we  flagged when it was making its way through the legislature—provides: “Regulations adopted by the council that address political contributions shall apply equally to contributions to any federal or national committee or a non-State political committee as to any other committee covered thereby.”

This poorly drafted provision could be read to apply only to political parties “organized in the State” such as the federal account of a New Jersey political party.  But it could also be read to apply to all federal or national party committees such as the RGA and the DNC.  Indeed, on passage, a sponsor stated that “the legislation would require the investment council to put in place a rule prohibiting firms it selects to invest pension funds from making contributions to any national political organization.”

The statute could therefore restrict federal and national political contributions in ways that reach further than any other pay-to-play law in the country.  Moreover the State Investment Council chairman suggested that the state would have to liquidate existing investments if executives from those investment firms made contributions to national party organizations, even if the contributions were permissible at the time.

Governor Christie has not said whether he plans to sign the bill.  If the law passes, the State Investment Council may promulgate regulations interpreting the law more narrowly.  And even if the law is interpreted to bar contributions to federal party committees and groups like the RGA and DGA, it seems highly vulnerable to challenge on First Amendment and federal preemption grounds.  But in the meantime, as we approach a Presidential election, the political contributions of many on Wall Street and in the financial industry could be chilled and fundraising for national party committees may take a hit.

ARTICLE BY

Zachary G. Parks
Covington & Burling LLP

Paid Sick Leave Spreads Throughout New Jersey

Sheppard Mullin Law Firm

While the New Jersey Senate and Assembly continue to debate state-wide sick leave laws, four more New Jersey municipalities have enacted mandatory sick leave laws for private employers.  Effective January 2015, East Orange, Paterson, Irvington and Passaic will join Newark and Jersey City in requiring paid sick time for employees.

Under the recently passed ordinances of those municipalities, most employees of private employers who work a total of 80 hours or more in a covered municipality will accrue at least one hour of paid sick time for every 30 hours worked.  For employees who are exempt from the overtime requirements of the Fair Labor Standards Act, employers should assume a 40 hour workweek, unless the employee’s normal workweek is less than 40 hours.  If the exempt employee’s normal workweek is less than 40 hours, accrual may be based on the employee’s normal workweek.

Employees who work for employers with 10 or more employees in the municipality may accrue up to 40 hours of paid sick time in a calendar year, while employees who work for employers with less than 10 employees in the municipality may accrue up to 24 hours of paid sick time per calendar year, with some exceptions.  For example, home health care workers and food service workers may accrue up to 40 hours per calendar year regardless of the size of the employer.

Paid sick time accrual begins upon the effective date of the applicable ordinance and thereafter upon the date of hire.  However, accrued time may not be used until after the 90th calendar day of employment.  After 90 calendar days of employment, employees must be permitted to use accrued sick time for several reasons including:

  • To care for their own or a family member’s sickness, need for medical diagnosis, care or treatment of a sickness, or need for preventative medical care; or

  • Due to a forced closing of the employee’s place of business or to care for a child whose school or place of care has a forced closing, or to care for a family member when a health authority or a health care provider has determined that the family member’s exposure to a communicable disease would jeopardize the health of other’s in the community.

The ordinances allow an employer to require reasonable advance notice where the leave is foreseeable and as soon as practicable where it is not.  The ordinances also permit an employer to request that the employee confirm in writing that the time was used for a permissible purpose, and where the employee has been out for three or more consecutive days, the employer may request reasonable supporting documentation from a health care professional.  An employer may not, however, require that the documentation explain the nature of the illness.  To the extent any health information is disclosed, such information must be treated as confidential and only disclosed to the affected employee or with the affected employee’s permission.

Once accrued, up to 40 hours of paid sick time may be carried over into the next calendar year.  An employer may, however, elect to pay its employees for unused sick time at the end of the calendar year in lieu of carry over.  Note that even where an employee does carry over accrued paid sick time, an employer is not required to permit the employee to take more than 40 hours of paid sick time in a calendar year.  The “calendar year” may be defined by the employer as any regular consecutive 12-month period.

Employers who already have paid time off policies that provide sufficient paid time to satisfy the total annual accrual requirements of the applicable ordinance, and permit such paid time off to be used for the same purposes identified in the ordinance, are not required to provide additional paid time.  Employers should be mindful, however, that if their current policy only provides paid time off to full-time employees, either their policy should be modified to extend such paid time off to all employees who work more than 80 hours in a covered municipality or a separate policy should be implemented for part-time and temporary employees that satisfies the minimum requirements of any applicable ordinance.

While none of the ordinances require an employer to pay employees for accrued but unused sick time upon separation, if an employee is rehired within six months, any accrued but unused sick time must be reinstated.  Likewise, if an employee is transferred within the municipality the employee retains any unused sick time.

Each of the ordinances provide expansive protections against retaliation and require employers to provide individual employees with notice of their rights under the law.  Notice to individual employees must be in English and in the employee’s primary language, provided the employee’s primary language is the primary language of at least 10% of the employer’s workforce.  Employers are also required to display a poster in a conspicuous and accessible place in each covered business establishment.  In addition, employers must maintain records documenting their compliance with the applicable ordinance.

Failure to comply with these ordinances may result in fines, civil penalties, or a private action by a current or former employee.  As such, employers in the covered municipalities should familiarize themselves with the applicable ordinances and take steps to ensure compliance.

ARTICLE BY

Lisa M. Harris
OF
Sheppard, Mullin, Richter & Hampton LLP

‘Jersey Shore’ Star Pleads Not Guilty to Tax Fraud

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C’mon, admit it: you’ve watched at least a few minutes of MTV’s “Jersey Shore.” Okay, fine, not all of us have let our curiosity get the best of us, but for those who have, one of the main characters of the series is currently making headlines for a tax fraud case.Mike Sorrentino, whose nickname on the show was “The Situation,” is currently facing charges that he and his brother failed to pay $8.9 million of taxes between 2010 and 2012.

According to the IRS, the brothers filed false income tax returns, failing to report personal and business income and claiming false business deductions. Those earnings were largely from public appearances for which potentially thousands of dollars were paid. Authorities also accused Sorrentino of altering accounting records or having them altered after a grand jury issued a subpoena.

Sorrentino denies the allegations and has pleaded not guilty to the charges. His attorney made a public statement last month that Sorrentino “denies that he criminally violated the tax laws.” In effect this means that he is claiming the violations were due to negligence rather than fraud.

The difference between tax negligence and tax fraud is pretty significant, not only in terms of the mental state of the taxpayer at the time the filing was made but also in terms of the penalties attached. Penalties for fraud, of course, are much more significant.

While the IRS usually has a pretty good idea of when an individual has committed fraud or negligence, this is not always the case. Those who have been wrongfully accused of tax fraud need to work with an experienced attorney to ensure their rights are protected.

ARTICLE BY

McBrayer, McGinnis, Leslie & Kirkland, PLLC

New Jersey Employers: $8.38 Minimum Wage Effective January 1

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As you may remember, in November 2013, voters approved an amendment to the New Jersey Constitution increasing the state minimum wage to $8.25.  The amendment also created annual cost of living increases, tied to the Consumer Price Index, to be added to the minimum wage each year.  The increases are calculated each September and take effect on the following January.  Therefore, effective January 1, 2015, New Jersey minimum wage will rise from $8.25 to $8.38.  Employers must ensure that all work performed by employees on and after January 1, 2015 is compensated at the increased rate.  Employers should be especially mindful of this change if January 1 falls in the middle of a pay period.

© 2014 Giordano, Halleran & Ciesla, P.C. All Rights Reserved

ARTICLE BY

Saranne E. Weimer
OF
Giordano, Halleran & Ciesla, P.C.

Will Governor Christie Extend the Moratorium on Non-Residential Development Fees?

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A new bill (A1907) that would extend the statewide moratorium on the collection of non-residential development fees (“NRDFs”) recently passed both the New Jersey State Assembly and Senate. It now awaits Governor Christie’s signature. If signed into law, the bill would reinstate the moratorium on the collection of NRDFs that expired July 1, 2013, extending it to December 31, 2014. Developers who paid NRDFs during that period would be eligible to seek a refund, which must be granted so long as the NRDF has not already been expended for affordable housing.

NRDFs were initially established in New Jersey by P.L. 2008, c. 46 and codified in the Municipal Land Use Law. For any non-residential development, the required NRDF is 2.5% of the equalized assessed value of land and proposed improvements. The NRDF is collected at the municipal level and paid into a state fund for the development of affordable housing.

The initial moratorium on the collection of NRDFs was contained in P.L. 2009, c. 90 and ended July 1, 2010. The second moratorium was found in P.L. 2011, c. 122, which extended the moratorium to July 1, 2013. As of July 1, 2013, municipalities were again required to impose a n NRDF on new non-residential development. No NRDFs may be assessed against projects that received site plan approval prior to July 1, 2013, provided that a construction permit is issued by July 1, 2015.

If signed into law, the re-imposition of the moratorium would be an important albeit relatively short lived, benefit to non-residential developers.

ARTICLE BY

Michael A. Bruno
Steven P. Gouin
Of:
Giordano, Halleran & Ciesla, P.C

Attention Tenants! Grow-NJ Tax Credits Without Prevailing Wage

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A little known regulation makes a big difference for tenants taking less than 55% of a leased facility. Namely, these tenants may be eligible to receive millions of dollars of monetizable corporate income tax credits under New Jersey’s Grow-NJ Program, without having to comply with that program’s prevailing wage mandate. For many, especially suburban tenants, that equates to a great deal of free money.

Grow-NJ is economic incentive program born out of the New Jersey Economic Opportunity Act of 2013 (L. 2013, c. 161) (“EOA”) and administered by the New Jersey Economic Development Agency (“NJEDA”). The goal of the program is to encourage businesses to either stay in or relocate to New Jersey. The program does this by offering tax credits for each job created or retained that range from $500 to $5000 per job, depending on the scope, location, and industry of the project.

However, the EOA specifies that each Grow-NJ recipient must agree to pay the “prevailing wage” to its contractors. The “prevailing wage” is that wage and fringe benefit rate based on collective bargaining agreements established for a particular craft or trade in the locality where the project is taking place. In New Jersey, prevailing wage rates vary by county and statewide and by the type of work performed.

Paying the “prevailing wage” can increase the cost of tenant work by 20% to 30% over non-prevailing wage. Though less of a concern in urban areas where tenants are likely to use union workers, in suburban areas, paying the “prevailing wage” may add substantial costs to the project. Depending on size of the award, this added cost may negate the value of the tenant’s Grow-NJ tax credits.

However, the NJEDA’s regulations provide an important exception to Grow-NJ’s prevailing wage requirements. Under the N.J.A.C. 19:30-4.2, the prevailing wage need not be paid on any project where:

(1) It is performed on a facility owned by a landlord of the entity receiving the assistance;

(2) The landlord is a party to the construction contract; and

(3) Less than 55 percent of the facility is leased by the entity at the time of the contract and under any agreement to subsequently lease the facility.

Because of this regulation, tenants taking less than 55% of a leased facility may be able to benefit from Grow-NJ’s tax credits, without paying “prevailing wage” for their fit-out.

Article By:

Michael A. Bruno
Steven P. Gouin
Of:
Giordano, Halleran & Ciesla, P.C.

Paid Sick Leave: Connecticut Tweaks and Newark Speaks

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The Connecticut Paid Sick Leave Law has been tweaked in three respects: (1) to allow employers to determine the 50-employee applicability threshold in the same manner as under the state’s Family and Medical Leave Act, i.e., by determining whether the employer has at least 50 employees on its payroll for the week containing October 1; (2) to allow accrual of paid sick leave hours on any annual basis, not just a calendar year, and (3) to add one additional job title—radiologic technologists—to the list of “service worker” titles that are eligible for paid sick leave. The law adopting the tweaks— An Act Creating Parity between Paid Sick Leave Benefits and Other Employer-Provided Benefits (Public Act 14-128)—is effective January 1, 2015.

Newark, N,J. whose  Paid Sick Leave Ordinance became effective on June 21, 2014, has issued FAQs about the ordinance. There are 24 FAQs–a dozen directed to employers and a dozen directed to employees. The FAQs address a myriad of questions on topics such as employee eligibility, accrual of paid sick leave, employer notice obligations, appropriate uses of paid sick leave and the law’s integration with collective bargaining agreements.

Also on the paid sick leave issue, the Massachusetts Secretary of State announced last week that voters in November will be asked whether to approve a mandatory earned sick time law. If the issue passes, Massachusetts would become the second state and ninth jurisdiction to adopt a paid sick time law.

Article By:

Michael J. Soltis
Of:
Jackson Lewis P.C.

January 2014 New Jersey Regulatory Developments

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The following are the most recent health care related regulatory developments as published in the New Jersey Register on January 6, 2014:

  • On January 6, 2014 at 46 N.J.R. 12, the Department of Banking and Insurance published notice of its proposal of amendments to its rules and the proposal of a new rule governing the Small Employer Health Benefits Program.  The amendments were proposed in order to comply with the requirements of the federal Affordable Care Act.
  • On January 6, 2014 at 46 N.J.R. 76, the Department of Human Services published notice of its readoption of its rules governing outpatient mental health service standards.
  • On January 6, 2014 at 46 N.J.R. 77, the Department of Human Services published notice of its adoption of amendments to its rules governing managed health care services for Medicaid and New Jersey FamilyCare beneficiaries.
  • On January 6, 2014 at 46 N.J.R. 77, the Department of Human Services published notice of its readoption of its rules governing independent clinical laboratory services under Medicaid.
  • On January 6, 2014 at 46 N.J.R. 93, the Department of Human Services published notice of its adoption of amendments to its rules governing the scope of practice of athletic trainers outside of schools and professional teams.

Article by:

Beth Christian

Of:

Giordano, Halleran & Ciesla, P.C.

December New Jersey 2013 Health Care Regulatory Developments

Here are the most recent health care related regulatory developments as published in the New Jersey Register in December 2013:

  • On December 2, 2013 at 45 N.J.R. 2478, the Board of Medical Examiners published notice of its adoption of new rules which create the Genetic Counseling Advisory Committee and will require licensure of genetic counselors in the State of New Jersey.
  • On December 2, 2013 at 45 N.J.R. 2465, the Department of Health published notice of its cancellation of certificate of need calls for the following services:  (1) pediatric long-term care; (2) specialized long-term care; and (3) pediatric intensive care beds and services.  In addition, the Department of Health published notice that it was also postponing its certificate of need call for applicants for maternal and child health consortia changes in membership and intermediate and intensive bassinettes.
  • On December 16, 2013 at 45 N.J.R. 2602, the Department of Human Services published notice of its readoption of its rules governing community mental health services.
  • On December 16, 2013 at 45 N.J.R. 2602, the Department of Human Services published notice of its readoption of its rules governing payment for dental services under Medicaid.
  • On December 16, 2013 at 45 N.J.R. 2607, the Board of Physical Therapy Examiners published notice of its readoption of its rules governing the licensure and regulation of physical therapists and physical therapist assistants.
  • On December 16, 2013 at 45 N.J.R. 2618, the State Board of Dentistry published notice of its action on a petition for rulemaking filed by the New Jersey Dental Association requesting that the Board adopt a rule to establish regulatory guidance with respect to the corporate and/or unlicensed practice of dentistry in New Jersey.  This petition was filed following the issuance of a joint staff report on the corporate practice of dentistry by the U.S. Senate Committee on the Judiciary which found that corporations not owned by dentists operated dental clinics under the guise of providing administrative and/or financial management support to licensed dentists.  The Board referred the matter to its Rules and Regulations Committee for further deliberation.

Article by:

Beth Christian

Of:

Giordano, Halleran & Ciesla, P.C.

New Jersey Governor Publicly Signs DREAM Act, Calls Undocumented Students 'An Inspiration'

GT Law

 

On January 7, 2014, the Governor of New Jersey publicly signed the state’s DREAM Act,which provides in-state tuition benefits at public colleges and universities to undocumented graduates of New Jersey high schools. The legislation, which the Governor privately signed last month, emerged from a bipartisan compromise after legislators agreed to remove a provision that would have extended financial aid eligibility to undocumented students. The Governor previously said he would veto the bill if the financial aid provision remained.

Explaining his support for the law, the Governor stated, “Our job I believe as a government is to give every one of these children, who we have already invested hundreds of thousands of dollars in, an opportunity to maximize that investment for their own benefit, for the benefit of their families, and for the benefit of our state and our country.” The Governor also urged students who stand to benefit from the legislation to “make the most of the opportunity,” while a U.S. Senator for New Jersey released a statement describing New Jersey as “a more welcoming and inclusive state for immigrants and their families” due to the new law.

Article by:

Nataliya Binshteyn

Of:

Greenberg Traurig, LLP