Lawmakers Reach Deal On Arbitration Reform

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Gov. Chris Christie

TRENTON – With just 12 days left in the legislative session, Gov. Chris Christie and Democratic legislators have reached an agreement on arbitration reform, a key component of the governor’s “tool kit” for local property tax relief.

Christie, along with Senate President Steve Sweeney and Assembly Speaker Sheila Oliver, announced a plan to cap the raises and benefits that public workers can be awarded by arbitrators when contract negotiations reach an impasse.

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“New Jerseyans have waited a long time to see real reform happen in Trenton, which is why they deserve nothing less,” Christie said. “Today’s agreement is a positive step in that direction, but we still have more work to do before the end of the year.”

The deal:

  • Caps raises at two percent over the life of the contract. It will be applied to all salary items, such as the cost of across the board and cost of living increases, step increment payments and longevity pay.
  • Prevents arbitrators from awarding any new economic items moving forward. The agreement creates a prohibition on allowing non-salary economic issues to be arbitrated above the cap, unless already included in an existing contract. All salary items are subject to a maximum two percent cap.
  • Establishes a concrete deadline of 45 days from the filing of a request for interest arbitration to the date of award without any extensions. Both parties may request interest arbitration on the day the contract expires and awards will be implemented on the same day. All appeals must be decided within 30 days, if arbitrators do not comply with the 45 day deadline, they will be penalized.
  • Caps arbitrator compensation at $1,000 per day and $7,500 per case.
  • Increases ethical standards and training for interest arbitrators.
  • Randomizes the selection of interest arbitrators.
  • Takes effect on Jan. 1, 2011 and is set to sunset on April 1, 2014.
  • Creates a Task Force to examine the impact of interest arbitration reform and the effectiveness of the cap on restricting municipal spending. The taskforce will study the impact of the cap on taxes, services, expenditures, public safety, recruitment, retention and professionalism. The Governor will directly appoint four members and two members will be directly appointed by the Senate President and Assembly Speaker. The Task Force will provide its recommendations no later than Dec. 31, 2013.

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