A3378

An Act concerning police and fire interest arbitration and amending P.L.1968, c.303 and P.L.2010, c.105.

Be It Enacted by the Senate and General Assembly of the State of New Jersey:

1. Section 11 of P.L.1968, c.303 (C.34:13A-8.2) is amended to 8 read as follows:

a. Following the consummation of negotiations, the public employer shall conspicuously post on the municipal or county website a summary of the terms of each proposed collective negotiation agreement no later than 10 days prior to the execution of the contract. The public employer shall forward to the commission the summary of the terms of each proposed collective negotiation agreement, which shall be conspicuously posted on the commission’s website no later than 10 days prior to the execution of the contract.

The terms of the proposed collective negotiation agreement shall be posted in a standard form developed by the commission. The form shall display the estimated costs of compensation for each individual employee or group of employees, itemized by the specific form of compensation, the estimated cost of compensation at the time of the execution of the contract, and the incremental difference resulting from any changes from the previous contract. This information shall be displayed for each year of a proposed collective negotiation agreement.

The proposed collective negotiation agreement and accompanying employee compensation disclosure form shall be made available for inspection by the general public upon request during the local unit’s normal business hours beginning at least 10 days prior to the execution of the contract.

b. The commission shall collect and maintain a [current] file of [filed contracts in] current public employment contracts. Public employers shall file with the commission a copy of any contracts [it has] they have negotiated with public employee representatives [following the consummation of negotiations] within 15 days of the execution of the contract pursuant to paragraph (2) of subsection d. of section 2 of P.L.2010, c.105 (C.34:13A-16.7).

(cf: P.L.1968, c.303, s.11)

2. Section 2 of P.L.2010, c.105 (C.34:13A-16.7) is amended to read as follows:

2. a. As used in this section:

"Base salary" means the salary provided pursuant to a salary guide or table and any amount provided pursuant to a salary increment, including any amount provided for longevity or length of service. It also shall include any other item agreed to by the parties, or any other item that was included in the base salary as understood by the parties in the prior contract. Base salary shall not include non-salary economic issues, pension and health and medical insurance costs.

"Non-salary economic issues" means any economic issue that is not included in the definition of base salary.

“Salary schedule” means a system of providing routine salary increases based upon an employee’s performance and longevity.

b. An arbitrator shall not render any award pursuant to section 3 of P.L.1977, c.85 (C.34:13A-16) which, in the first year of the collective negotiation agreement awarded by the arbitrator, increases base salary items by more than 2.0 percent of the aggregate amount expended by the public employer on base salary items for the members of the affected employee organization in the twelve months immediately preceding the expiration of the collective negotiation agreement subject to arbitration. In each subsequent year of the agreement awarded by the arbitrator, base salary items shall not be increased by more than 2.0 percent of the aggregate amount expended by the public employer on base salary items for the members of the affected employee organization in the immediately preceding year of the agreement awarded by the arbitrator.

The parties may agree, or the arbitrator may decide, to distribute the aggregate monetary value of the award over the term of the collective negotiation agreement in unequal annual percentage increases, which shall not be greater than the compounded value of a 2.0 percent increase per year over the corresponding length of the collective negotiation agreement. An award of an arbitrator shall not include base salary items and non-salary economic issues which were not included in the prior collective negotiations agreement.

c. After the expiration of a collective negotiation agreement, a public employer shall suspend any salary increases based upon a salary schedule until a subsequent collective negotiation agreement is executed.

(cf: P.L.2014, c.11, s.2)

3. Section 3 of P.L.2010, c.105 (C.34:13A-16.8) is amended to read as follows:

3. a. There is established a task force, to be known as the Police and Fire Public Interest Arbitration Impact Task Force.

b. The task force shall be comprised of eight members as follows:

(1) four to be appointed by the Governor;

(2) two to be appointed by the Senate President; and

(3) two to be appointed by the Speaker of the General Assembly.

c. All appointments shall be made within 30 days of the effective date of P.L.2010, c.105 (C.34:13A-16.7 et al.). Vacancies in the membership shall be filled in the same manner as the original appointments. The members of the task force shall serve without compensation but may be reimbursed, within the limits of funds made available to the task force, for necessary travel expenses incurred in the performance of their duties.

d. (1) The task force shall organize as soon as is practicable upon the appointment of a majority of its members and shall select a chairperson from among the appointees of the Governor and a vice chairperson from among the appointees of the Legislature. The Chair of the Public Employment Relations Commission shall serve as non-voting executive director of the task force.

(2) The task force shall meet within 60 days of the effective date of P.L.2010, c.105 (C.34:13A-16.7 et al.) and shall meet thereafter at the call of its chair. In furtherance of its evaluation, the task force may hold public meetings or hearings within the State on any matter or matters related to the provisions of this act, and call to its assistance and avail itself of the services of the Public Employment Relations Commission and the employees of any State department, board, task force or agency which the task force determines possesses relevant data, analytical and professional expertise or other resources which may assist the task force in discharging its duties under this act. Each department, board, commission or agency of this State is hereby directed, to the extent not inconsistent with law, to cooperate fully with the task force and to furnish such information and assistance as is necessary to accomplish the purposes of this act. In addition, in order to facilitate the work of the task force, the Public Employment Relations Commission shall post on its website all collective negotiations agreements and interest arbitration awards entered or awarded after the date of enactment, including a summary of contract or arbitration award terms in a standard format developed by the Public Employment Relations Commission to facilitate comparisons. [All] A collective [negotiations agreements shall be] negotiation agreement that is not submitted to the Public Employment Relations Commission within 15 days of contract execution or does not include a summary of contract or arbitration award terms shall be deemed null and void until that agreement is properly submitted to the Public Employment Relations Commission.

e. (1) It shall be the duty of the task force to study the effect and impact of the arbitration award cap upon local property taxes; collective bargaining agreements; arbitration awards; municipal services; municipal expenditures; municipal public safety services, particularly changes in crime rates and response times to emergency situations; police and fire recruitment, hiring and retention; the professional profile of police and fire departments, particularly with regard to age, experience, and staffing levels; and such other matters as the members deem appropriate and necessary to evaluate the effects and impact of the arbitration award cap.

(2) Specifically, the task force shall study total compensation rates, including factors subject to the arbitration award cap and factors exempt from the arbitration award cap, of police and fire personnel throughout the State and make recommendations thereon. The task force also shall study the interest arbitration process and make recommendations concerning its continued use in connection with police and fire labor contracts disputes. The task force shall make findings as to the relative growth in total compensation cost attributable to factors subject to the arbitration award cap and to factors exempt from the arbitration award cap, for both collective bargaining agreements and arbitration awards.

f. The task force shall annually report its findings, along with any recommendations it may have, to the Governor and, pursuant to section 2 of P.L.1991, c.164 (C.52:14-19.1), to the Legislature. The task force's final report due on or before December 31, 2017 shall include, in addition to any other findings and recommendations, a specific recommendation for any amendments to the arbitration award cap. Upon the filing of its final report on or before December 31, 2017, the task force shall expire.

(cf: P.L.2014, c.11, s.3)

4. Section 4 of P.L.2010, c.105 (C.34:13A-16.9) is amended to read as follows:

4. This act shall take effect January 1, 2011 [; provided however, section 2 of P.L.2010, c.105 (C.34:13A-16.7)] and shall apply [only] to collective negotiations between a public employer and the exclusive representative of a public police department or public fire department that relate to negotiated agreements expiring on that effective date or any date thereafter [until or on December 31, 2017, whereupon, after December 31, 2017, the provisions of section 2 of P.L.2010, c.105 (C.34:13A-16.7) shall become inoperative for all parties except those whose collective negotiations agreements expired prior to or on December 31, 2017 but for whom a final settlement has not been reached]. This act also applies to collective negotiations between a public employer and the exclusive representative of a public police or public fire department where there had been no prior collective negotiations agreement between the parties as of the effective date of the act.

(cf: P.L.2014, c.11, s.4)

5. This act shall take effect immediately.

STATEMENT

The bill makes permanent the two-percent cap on base salary increases in interest arbitration awards. This bill also makes various changes to the State’s interest arbitration procedures for settling contractual impasses between public employers and their police and fire departments.

The bill also repeals the “sunset” provision established in P.L.2010, c.105 that provides for the expiration of the two-percent cap on base salary increases in arbitration awards on December 31, 2017. The cap applies to collective negotiated agreements that expire between the effective date of the act, January 1, 2011, and December 31, 2017. The two-percent cap applies to arbitration cases involving agreements that expire during this period, even if the arbitrator’s award was not rendered until after the “sunset” date of December 31, 2017. Parties that entered into contracts that expire during the sunset period currently are not subject to the two-percent cap when negotiating future contracts under this current law. This bill repeals the sunset provision set forth in P.L.2010, c.105, effectively making permanent the two-percent cap. The bill also clarifies that the two-percent cap applies not only to expiring contracts, but also to all police and fire collective negotiations, including those cases in which there was no initial collective negotiations agreement prior to the effective date of P.L.2010, c.105.

Under current law, collective negotiations agreements are required to be submitted to the Public Employment Relations Commission (PERC) within 15 days of a contract’s execution. This bill provides that collective negotiations agreements that are not filed within the 15-day time period or do not include a summary of contract or arbitration award terms are deemed null and void until properly submitted to PERC.

In addition, the bill requires public employers to post on their municipal or county website a summary of the terms of each proposed collective negotiation agreement no later than 10 days prior to the execution of the contract. The public employer is required to forward to PERC the summary of the terms of each proposed collective negotiation agreement, which is to be conspicuously posted on the commission’s website no later than 10 days prior to the execution of the contract. The bill requires that the terms of the proposed collective negotiation agreement be posted in a standard form developed by PERC. The form would display the estimated costs of compensation for each individual employee or group of employees, itemized by the specific form of compensation, the estimated cost of compensation at the time of the execution of the contract, and the incremental difference resulting from any changes. This information is required to be displayed for each year of a proposed collective negotiation agreement. The bill also requires the proposed collective negotiation agreement and accompanying employee compensation disclosure form to be made available for inspection by the general public, upon request, during the local unit’s normal business hours.

Finally, the bill provides that a public employer is required to suspend salary increases that are based upon a salary schedule following the expiration of a collective negotiation agreement until a subsequent collective negotiation agreement is executed.

As recommended in the 2017 report issued by the Governor’s appointees to the Police and Fire Public Interest Arbitration Impact Task Force, the bill preserves changes made by P.L.2014, c.11 to allow arbitrators 90 days to render a decision; allow an aggrieved party 14 days to file a notice of appeal; require PERC to render its decision in an appeal within 60 days; and establish an arbitrator’s compensation for services at $10,000. The provisions of P.L.2014, c.11 that provide for compounding the value of a two-percent cap over the length of the collective negotiation agreement and include previously negotiated cost increments within the definition of “base salary” also are preserved.