New Jersey May Require State Agency to Survey Businesses that Leave the State

New Jersey CapitolThe overall economic outlook for New Jersey is cautiously optimistic, at least according to some sources. The New Jersey Business & Industry Association (NJBIA) describes a gradual increase in “business confidence” in its annual Business Outlook Survey, but it also notes several downward trends. People are apparently leaving the state in substantial numbers, as are many businesses, resulting in fewer jobs and less income statewide. The NJBIA offers possible explanations for why this is happening and what might be done about it. The state is also taking steps to evaluate the situation. A bill that recently passed the New Jersey Senate, which is now awaiting action in the Assembly, would direct the New Jersey Department of Labor and Workforce Development (LWD) to conduct detailed surveys of businesses that are leaving the state.

In 2007, the New Jersey Legislature enacted the Millville Dallas Airmotive Plant Job Loss Notification Act, also known as the NJ WARN Act. P.L.2007, c.212; N.J. Rev. Stat. § 34:21-1 et seq. The law applies to employers that have done business in the state for over three years and that have at least 100 full-time employees. Covered employers are required to provide a notice, in a specified form, to any employee who is terminated as part of a “mass layoff” or to all employees who lose their jobs as a result of a “transfer of operations” or “termination of operations.” Id. at § 34:21-2. The law also directs the LWD’s response team, whose purpose is to assist laid off employees, to offer to consult with the business’ management and workers.

While the NJBIA’s 2017 Business Outlook survey shows optimism among business owners, another study published in early 2016 shows significant rates of “outmigration” by both residents and businesses. From 2005 to 2014, the NJBIA estimates that more than two million people moved away from New Jersey, and this cost the state about $18 billion in net revenue. It further estimates that the state has lost about 75,000 jobs and $11.4 billion in “lost economic activity.” Despite these grim statistics, other measurements seem much more hopeful. Another organization, for example, reported that home sales in New Jersey have increased by more than 30 percent since early 2015.

The New Jersey Legislature is now seeking to get the state more actively involved in understanding these issues and trends. The Senate passed S1207, which directs the state to “move past anecdote and begin gathering as much data as possible to understand why businesses struggle or fail,” by a unanimous vote on February 13, 2017. The Assembly received the bill on February 8 as A2715 and referred it to the Labor Committee.

The bill directs the LWD to survey businesses that are subject to the NJ WARN Act to obtain information, including “specific law[s] or regulation[s] that the employer found problematic,” any contacts with state officials regarding any such law, and any “economic development or jobs retention incentive” that benefited the business. The LWD must also present an annual report to the Governor with survey results and various analyses.

Business attorney Samuel C. Berger offers fixed-fee legal-service packages, which cover a wide range of legal matters, to entrepreneurs, business owners, and businesses in New York City and Northern New Jersey. To schedule a confidential consultation with a skilled and experienced business advocate, contact us today online, at (201) 587-1500, or at (212) 380-8117.

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Photo credit: Marion Touvel [Public domain], via Wikimedia Commons.