TRENTON – Legislation sponsored by Senate President Steve Sweeney and Senator Troy Singleton that will promote a “Responsible Contractor Policy” to ensure that contractors, investors, managers, consultants, or others selected by the state’s retirement system make investments that support fair wages and benefits for workers was approved by the Senate Budget Committee today.
The bill, S-857, would set conditions on domestic equity investments in the private real estate, private equity, and private infrastructure asset classes in which the Division of Investment in the Department of the Treasury has more than a 50 percent interest. The bill also would impose requirements related to the protection of public sector jobs and the selection of external managers.
“We have an interest in the condition of workers employed by its managers, contractors and subcontractors that are consistent with the ideals of labor unions and others who advocate for workers’ rights,” said Senator Sweeney (D-Gloucester/Salem/Cumberland). “We believe that workers should be treated with respect and fairness, that they should be compensated for their hard work with fair pay and benefits. A workforce that is treated the way they should be produces a higher quality product and service and is a vital part of any successful business.”
The bill defines a “responsible contractor” as one which, among other requirements, submits to the property or external manager a responsible contractor self-certification form; provides the Director of the Division of Investment and the external manager with responsible contractor documentation; and pays workers fair wages and fair benefits including employer-supported family health care coverage, pension benefits and apprenticeship training programs.
“The Responsible Contractor Policy will help to ensure that our workers are being treated fairly,” said Senator Singleton (D-Burlington). “New Jersey is a workers rights’ state with unions that help protect and promote fairness in the workplace. State government must set the example so that these standards are not lost or compromised.”
“The New Jersey State AFL-CIO thanks Senate President Sweeney and Senator Singleton for this worker-friendly and fiscally prudent bill,” said Charles Wowkanech, President of the New Jersey State AFL-CIO. “It ensures that, when investing worker pension funds, the state does so responsibly. This bill will promote investment in projects that provide good jobs paying fair wages and benefits in safe workplaces. It also maintains job security for our union brothers and sisters in the public sector, and enhances their retirement security through wise investments.”
The policy adopted pursuant to this bill is prospective and the bill does not require the divestment of any pension funds that may be held at the time of enactment.
The bill also prohibits the division from approving any investment that has the potential to eliminate public sector jobs, would pose a reputational risk to the state-administered retirement systems, or could bring public or regulatory scrutiny to the retirement systems.
The bill further requires the director to exercise due diligence in the selection of external managers and requires those managers to be of good character.
The bill was released from committee by a vote of 8-3.