NJEA Sues to Halt Reform Law

The New Jersey Education Association filed suit last week to overturn a law that requires public employees, including teachers, to contribute 1.5 percent of their salary toward healthcare benefits.

The suit, filed April 28 in Mercer County Superior Court, contends that the new law violates the collective bargaining rights of school employees and the mandatory contributions equate to an illegal salary reduction for public employees.

The NJEA suit is similar to two other suits filed last week by firefighters and police and other public employee unions, which challenged the 1.5 percent requirement as well as other pension reforms.

The governor’s office has said the suits are without merit, and the pension and benefits reforms are reasonable compromises.

The suits stem from legislation (S-2, S-3 and S-4) signed into law in late March. NJSBA supported the legislation.

S-2 limits enrollment in the pension system to employees who work at least 35 hours per week at the state level, or 32 hours per week in local government and public schools. The law also changes the equation used to calculate pension benefits for future employees by dividing the number of years worked by 60, instead of the previous 55. The bill changes retirees’ pension calculations from the three highest years of an employee’s salary to the five highest years of salary.

S-3 requires all employees, including current school district employees, to pay at least 1.5 percent of their salary toward their health benefits after the expiration of their current contract. New employees will pay at least 1.5 percent of their base pension toward post-retirement health benefits.

S-4 limits sick leave payouts for all new local and school employees to $15,000.

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