A recent decision by Mercer County Assignment Judge Linda R. Feinberg clears the way for New Jersey municipalities to keep escalating employee health care and pension costs under control and local property taxes down.

On January 19, 2011, Judge Feinberg ruled against numerous public employee unions who had challenged Governor Christie’s recently enacted pension and health benefit reforms as unconstitutional. In doing so, local governments may, except in the case of existing collective bargaining agreements, implement the following:

A provision that active and new employees be required to pay at least 1.5% of their base salary toward the cost of health care coverage provided by the municipality.

Limit compensation for accumulated unused sick leave to $15,000 for new employees.

Prohibit duplicate health care coverage for active and retired employees.

Limit health care eligibility for new employees to full time employees who work at least 25 hours per week.

The reforms should be a part of any new collective bargaining agreement with union personnel. With a State imposed 2.5% cap on spending, Judge Feinberg’s ruling is good news for municipalities struggling to make their budget work.

For questions or assistance with land use, municipal law, public employment and labor law issues, do not hesitate to contact a member of the Public Employment and Labor Practice Group at Laddey, Clark & Ryan, LLP.

This Laddey, Clark & Ryan, LLP Client Alert provides information of general interest to our readers. It is not intended, and should not be used, as a substitute for consultation with legal counsel. If you have any questions regarding specific issues raised in this Client Alert, you may contact Laddey, Clark & Ryan’s Land Use Practice Group at (973)729-1880.