Why this, why now: Family-leave bill would crush small business

New Jersey's business community is asking a basic question: At a time of economic uncertainty and intense strain on small businesses, why is the Legislature, in a lame-duck session, moving to dramatically expand the state's family leave mandate to employers with as few as five workers? So far, no one has offered a clear or convincing answer.

The proposal, A-3451, would significantly lower the threshold for job protections under family leave from 30 employees to just five. The bill has already passed the Assembly and is now in the Senate, with its sponsors seeking final passage before the lame-duck session ends next month.

If enacted, this legislation would require New Jersey businesses with five to 30 employees to hold positions open for workers who take up to 12 weeks of family leave - a mandate many small employers say they simply cannot absorb.

Supporters frame this as a worker-friendly update. But for the smallest of small businesses - the backbone of New Jersey's economy - this bill represents something different: a potentially devastating new mandate at the worst possible time.

So again, we ask: What is driving this? Why are we doing this now? Where is the empirical data showing it is necessary at this moment in our economic cycle?

Small Businesses are Worried

New Jersey is not in a position to place more burdens on the business community. Quite the opposite.

Our state currently has one of the highest unemployment rates in the nation, exceeding those of our neighboring states. Small businesses are shedding jobs at an alarming pace. According to ADP, small firms in the U.S. with fewer than 50 employees cut 120,000 jobs last month alone. Meanwhile, here in New Jersey, collections from the state Corporation Business Tax are down by approximately 55% through August - a warning sign that our business community is under real financial strain.

Yet, in the middle of this economic uncertainty, the Legislature is proposing to add another cost and compliance burden to the smallest employers in the state.

Operational Chaos

Expanding this mandate to thousands of small businesses does not just raise labor costs. It introduces operational chaos, legal exposure, and permanent uncertainty into businesses already struggling to survive in one of the most highly regulated, highly taxed states in the country.

Uncertainty is one of the biggest threats to business growth. This bill injects a new layer of it.

New Jersey's small business community is deeply concerned about the economic outlook for 2026. They are grappling with inflation, supply chain disruptions, labor shortages and ever-rising overhead.

Economic Reality

Against this backdrop, state policymakers should be focused on strengthening the economy, accelerating job creation, reducing regulatory mandates, and attracting private investment. Instead, A-3451 moves us in the opposite direction.

No one is disputing the importance of family leave. An overwhelming majority of small employers know it is important to support their workers during family emergencies and major life events - and they do that now. We are opposed to policies that ignore economic reality and place unsustainable burdens on the very enterprises that power our economy.

Other states are working aggressively to become more business-friendly by reducing onerous regulations and taxes. New Jersey cannot afford to be left behind.

So again, we ask: Why this bill? Why now?

This is not the time. The Legislature should hit pause, take a hard look at the data, and focus instead on policies that grow our economy - not shrink it.

Our emphatic request - to stop this bill and future bills that would damage the economy - is for the members of the Legislature to focus on the current plight of our business community. This will help put New Jersey on the path to prosperity.

- Tom Bracken, President & CEO, New Jersey Chamber of Commerce