TRENTON – A bill sponsored by Senator Ellen Karcher which would allow early retirees to be eligible for unemployment benefits was approved by the Senate today by a vote of 37-0.
“In recent years, many tech-based giants, such as IBM, Lucent Technologies, AT&T and others, have had to rely on early-retirement incentives to cut costs and stay economically solvent,” said Senator Karcher, D-Monmouth and Mercer. “Effectively, these early retirees avoided being laid off by voluntarily cashing in on their years of service, but regardless of how they got there, the early retirees, many of whom still have to support families and cannot make ends meet on fixed incomes, are unemployed. To meet the spirit of the State’s unemployment law, they should be allowed to collect if they are eligible for unemployment benefits.”
The bill, S-2338, would amend the current unemployment law to allow employees who have volunteered to participate in a company’s early retirement incentive program to be eligible for unemployment compensation. Under the bill, to be eligible they must have shown that they left employment through no fault of their own. The bill is designed to address a trend in corporate America of downsizing the workforce through attrition and early retirement incentives before layoffs and other cost-saving initiatives are considered.
“Downsizing wasn’t in our vocabulary when the State first enacted its current unemployment law,” said Senator Karcher. “However, in today’s business world, it’s become common practice to head off forced layoffs by enticing employees with early retirement incentive packages. We need to adapt our definition of unemployment to reflect the realities of business that everyday citizens face today.”
The bill now heads to the Assembly for consideration before going to the Governor to be signed into law.