TO:                 CIANJ Human Resource Council

FROM:           Paul Tyahla, Vice President, Government Affairs & Communications, CIANJ

DATE:            Tuesday, June 16, 2009

SUBJECT:      S-2773/A-3919 - Proposed New Penalties for Non-Compliant Companies

On Monday, June 15, 2009, the Senate Labor Committee advanced a piece of legislation to punish employers who fail to meet their tax, wage and/or benefit obligations.
The bill, S-2773, is available at this link. The legislature's "plain language" explanation is also available on-line. In short, the bill authorizes the Commissioner of Labor and Workforce Development to suspend a company’s business license for failure to meet its tax, wage and/or benefit requirements. The duration of the suspension is at the discretion of the Commissioner. If a subsequent audit finds other failings, the Commissioner may revoke any and all business licenses held by a company. There is a mechanism for the company to appeal through a hearing, but it is very different than a court proceeding.
 
CIANJ testified in opposition to the bill, along with other business associations. Our primary objections were:
 
  • Law already exists to punish habitually offending companies, including prison terms in some cases. Layering an administrative penalty sends an unnecessary negative message to businesses, and
     
  • This bill grants the Commissioner of Labor, a political appointee, authority that is inappropriately broad. There are no objective standards to determine the length of a suspended license, and that risks inconsistent penalty applications as Commissioners and Governors change.
The June 15 hearing was the first of at least four legislative steps that must be taken for this bill to become a law. CIANJ's memo to legislators noting the Association's opposition is available at this link. CIANJ members with questions or concerns should e-mail ptyahla [no spam] cianj.org.