New Workers' Comp Law, Unemployment Costs, and a proposed Millionaires Tax
Dear New Jersey Members,
I want to bring you up to date on the latest legislative news impacting small business news in our state that continues to be of concern.
New Workers’ Compensation Law
This week Governor Murphy signed a worker’s compensation bill into law even though many of you supported the NFIB fight to stop this legislation. I am grateful to everyone who emailed the legislature and the Governor’s office in opposition. The new law creates a presumption that any essential employee who contracted COVID-19, contacted the illness on the job. Sadly, this has the potential to impact every businesses’ worker’s compensation rate. NFIB argued that the federal CARES Act money was meant to cover the costs of essential workers who truly contracted COVID-19 on the job. Also, it would have made more sense to limit the time frame of the law to the time when the stay-at-home order was in place when essential employees had far fewer movements between work and home. Instead, this new law is in place until the Governor lifts the emergency order.
Unemployment Contributions to rise?
Yesterday, the Labor Commissioner spoke before the Senate Budget Committee on the budget that must be voted on by September 30. He stated that although the final review is months away, an increase in the assessment the state requires employers contribute toward unemployment benefits will increase without federal intervention. New Jersey has seen record unemployment benefit applications depleting the UI fund.
Governor Murphy’s proposed budget also creates a new tax bracket with a tax rate from 8.97% to 10.75% for taxable income over one million dollars. This income tax surcharge may harm small business owners who file as pass-through entities for tax purposes. It will also hurt when a small business owner sells business, property and assets, which often happens at retirement age. If the legislature agrees to this tax hike it means significantly more of your money will end up in state coffers rather than your retirement nest egg.
New Jersey should reduce state spending and live within its budget, something small business owners must do. Thank you for your involvement!
State Director of NFIB in New Jersey