Legislation that would prevent an automatic $350 million payroll tax increase on employers cleared the State Senate on May 22. The bill, S-1698 (Buono), would add $260 million to the Unemployment Insurance (UI) fund so it can continue to pay claims. Without the money, employers’ payroll taxes will automatically increase on July 1.

The money is needed to shore up the balance in the UI fund, which has dropped considerably because the State has continually diverted past payroll taxes that were supposed to be dedicated towards unemployment benefits. While Governor Jon Corzine is the first Governor in recent memory not to raid the UI fund, past governors have diverted $4.7 billion in UI tax revenues over the last 14 years. The $260 million would replace some of that money and keep the fund solvent through 2009. For more information, contact at ext. 209.

Greater Efficiency, Use of Renewable Energy Is Key to Controlling Energy Costs, State Officials Say

Controlling energy costs through efficiency and renewable sources will be the key to implementing the recently released State Energy Master Plan, top governmental officials said at NJBIA’s Meet the Decision Makers event on May 16. Assemblyman Upendra Chivukula, chairman of the Utilities and Telecommunications Committee, Assemblywoman Marcia Karrow, a member of the Budget Committee, and Joseph Fiordaliso, a commissioner of the NJ Board of Public Utilities (BPU), spoke to about 150 NJBIA members and took questions from the audience.

Chivukula said the Energy Master Plan will guide the State for the next few years, but reducing greenhouse gases while meeting increasing energy demand will present big challenges. "These are lofty goals," he said of the State’s goal of reducing greenhouse gases 80 percent by 2050. "How do you do that?" Chivukula wants to encourage companies to generate more of their own power on site and has introduced legislation to allocate $60 million for such projects.

Karrow said New Jersey should do a better job of allocating the money collected from the Societal Benefits Charge on energy bills by directing more of it towards commercial and industrial energy users. Businesses pay the most towards these government programs, and businesses have proven more effective at achieving energy efficiencies than residential users, even though most of the money goes to residential projects. "Quite frankly, it’s blatantly unfair," Karrow said. "It’s inequitable distribution of what is effectively your tax dollars."

In meeting New Jersey’s greenhouse-gas-reduction goals, Fiordaliso said the BPU would pursue policies that have economic benefits as well by making New Jersey more energy efficient and generating more electricity through renewable energy sources. "Let’s grab the low-hanging fruit first when it comes to global warming," he said.

Top HR Experts Offer Recession Survival Tips at NJBIA-Fidelity Investments Economic Forum

Many companies can find savings in their human resource programs to help weather the economic downturn, three top New Jersey executives said during a May 21 panel discussion at the NJBIA-Fidelity Investments Economic Forum. Anthony Davis of Fidelity Investments, Allison Hofmann of QualCare Inc., and Phil Dzialo of ADP TotalSource provided money-saving tips on structuring health benefits, managing retirement programs and complying with a myriad of government-imposed workplace rules. Also, keynote speaker Michael Santoli, associate editor at Barron’s, said the economy is sputtering, but most companies are in a good position to deal with it.

Fidelity Investments’ Davis, who advises businesses on how to structure their retirement programs, said one way companies can save money is by moving from a traditional pension plan to 401-K-style defined-contribution plan. However, he cautioned that defined-contribution plans could have lower participation rates. "Like defined-benefits plans, the communication of any defined-contribution plan design change is critical so that employees clearly understand the additional financial responsibility they are being asked to assume," Davis said.

Dzialo of ADP TotalSource said that outsourcing various human resource functions is becoming more of a viable option for small and medium-sized employers. Businesses can take advantage of the expertise of a company that does nothing but HR management and prevent serious legal problems because an employment issue was not handled properly. "A fact of business life is that even the most well-run businesses can be liable in an employment-related lawsuit," Dzialo said. "What you do at the outset makes a difference. Those are the costs that sneak up on companies."

A new trend in health insurance, Hofmann of QualCare said, is value-based benefits, where strict usage rules and high co-payments for chronic diseases such as diabetes or heart disease are removed to encourage employees to fully treat their conditions. Studies show that one of the biggest causes of health insurance inflation is treatment of chronic diseases. But if chronic illnesses are managed properly when they are first diagnosed, the cost of treatment can come down over time. "Look at your own plan," Hofmann said. "If you have lower co-pays for chronic-disease medications, that’s a form of value-based benefits."

Barron’s Santoli said that outside of the financial sector, which is still reeling from the mortgage crisis, businesses are in much better shape than they were at the onset of the 2001 recession. During the ensuing expansion, businesses behaved conservatively, keeping debt and employment low. "That means there is a little less froth to be taken out during the downturn," he said. "Businesses have not been giddy about the economy for a while, so they were sort of preemptively cutting back."

NJBIA Government Affairs Publications Available Now Online

NJBIA produces many publications to alert our member companies to the legislative and regulatory actions in Trenton that impact their businesses. Each publication is a useful guide designed to help your company keep up with the latest developments in Trenton and stay in compliance. Access publications online.

Seminar: Hot Legal Topics for Employers, June 17

This half-day seminar is a must for human resources managers. NJBIA will bring together some of NJ’s foremost HR attorneys to cover critical workplace issues, such as paid family leave, hiring and firing, wage- and hour-compliance, and discrimination and harassment. Our panelists will cut through the legal jargon and tell you what you need to know to avoid legal liability. Register online now, or for more information, contact at 609-393-7707, ext. 213.