Monthly Archives: August 2013

“NJ Safe” Establishes New Employee Leave for Violence Victims

By CJ Griffin, Esq.

New Jersey employers with 25 or more employees should be aware that as of October 1, 2013, employees will be entitled to a new form of unpaid leave.

The New Jersey Security and Financial Empowerment Act (“NJ SAFE”) provides 20 days of unpaid leave to eligible employees who become the victims of domestic violence or a sexually violent offense.  NJ SAFE also permits an eligible employee to take leave when his or her child, parent, spouse, domestic partner or civil union partner has been the victim of domestic violence or sexual assault.

Employees are eligible if they have been employed by the company for at least 12 months and worked at least 1,000 hours during that timeframe.   Each incident of violence constitutes an offense which entitles the employee to leave, so long as the employee does not take more than a maximum of 20 days in any 12 month period.

An employee is to use the leave to: seek medical attention or recover from physical or psychological injuries; obtain services from victim services organizations; obtain psychological or other counseling; relocate or take other safety precautions; seek legal assistance or other remedies to ensure the health and safety of the victim or the victim’s family; or attend, participate in or prepare for a criminal or civil court proceeding relating to an incident.  Accordingly, the leave may be taken all at once or intermittently, as needed.

An employer may require the employee to use any accrued paid vacation leave, personal leave, or medical or sick leave during the 20-day absence. Further, any Family Medical Leave (FMLA) or NJ Family Leave Act (FLA) leave will run concurrently with the leave provided by NJ SAFE.

Discrimination, harassment and retaliation against employees who have requested or used leave is expressly prohibited and NJ SAFE provides employees with a private right of action in civil court. Remedies include reinstatement, compensation for lost wages and benefits, injunctive relief, and reasonable attorneys’ fees and costs. Significant fines ranging from $1,000 to $5,000 may also apply.  The statute of limitations for bringing suit is one year.

Employers should also note that in as of October 1, 2013, workplace signage should be updated to notify employees of their NJ SAFE rights and entitlement to leave after incidents of domestic violence and sexual assault.

Negotiating Commission Agreements for Commercial Leases

By Scott Lippert, Esq.

Recent experience negotiating commission agreements with commercial brokers served as a reminder to set forth fundamental principles in clear and concise fashion.  Typically, the broker will propose its form agreement, which may not deal with all the issues and, of course, will be broker-friendly.  While this is not intended to be an exhaustive list, the following issues should always be considered:

1. Calculation of Commission: Make sure the commissionable rent is defined precisely.  Items such as rent concessions and tenant electric, for example, should generally be excluded.

2. Term: At some point, the right to receive commissions should terminate.

3. Payment: Try to provide for a pay out over a reasonable amount of time.  The landlord would hate to be in a position of having paid a full commission on a long term deal where the tenant ends up defaulting early on in the term.  Also, the right to payment should accrue only upon the execution of a lease.

4. Marketing: The broker’s efforts to market should be clearly described.

5. Exclusions: Be sure to list any prior contacts that will not be subject to a commission.

6. Co-Brokerage: Set forth the circumstances under which the landlord’s obligation to pay co-brokerage fees will arise.

Most experienced commercial brokers will be receptive to reasonable modification of their standard agreement.  If you are getting an unusual amount of pushback, the landlord may want to consider doing business elsewhere.

Tax Court Finds Inland Storage and Repair Services Are Tax Exempt Services At A Marine Terminal Facility

By Sean Mack, Esq.

On July 19, 2013, the Tax Court of New Jersey issued a decision, which confirms that fees and charges for intermodal container storage services and related chassis repair services in the Newark/Elizabeth Port District are exempt from New Jersey’s Sales and Use Taxes.

In response to a challenge to its tax assessment by Plaintiff, Ironbound Intermodal, the New Jersey Tax Court had its first opportunity to interpret an exemption to New Jersey’s sales and use tax statute, which exempts receipts for certain services performed at “marine terminal facilities.”

In relevant part, the marine terminal facilities exemption provides:

Receipts from sales or charges for repairs, alterations or conversion of commercial ships or any component thereof including cargo containers of any type whatsoever, … machinery, apparatus and equipment for use at a marine terminal facility in loading, unloading and handling cargo carried by those commercial ships, … and storage and other services rendered with respect to such loading, unloading and handling cargo at a marine terminal facility … are exempt from the tax imposed under the Sales and Use Tax Act.  (N.J.S.A. 54:32B-8.12)

The plaintiff’s business involves the storage of intermodal containers, and chassis maintenance and repair services, which are required to keep the chassis in compliance with state and federal regulations.

The plaintiff’s facilities while located in Newark, are outside of Port Newark, are not located on the waterfront, do not have piers, wharves or the ability to load and unload cargo containers on and off ocean going vessels.  While those same services provided within Port Newark are tax exempt, the Division of Revenue deemed Plaintiff to be ineligible for the exemption because it was outside the Port and could not provide stevedoring services.

The term “marine terminal facility” is not defined in the Sales and Use Tax Act.  In reaching its conclusion, the court explained that the exemption was enacted to encourage cargo container owners to come to New Jersey for their repairs and maintenance, because New Jersey had been losing that business to New York companies, whose services could be provided tax free.

The tax court concluded that the plaintiff’s facilities in Newark were “marine terminal facilities” because they were “structures, facilities and improvements necessary or convenient to the accommodation of steamships or other vessels and their cargoes.”

Because the court found that plaintiff’s facilities constitute marine terminal facilities, its container storage services and chassis repair labor charges are exempt from taxation under N.J.S.A. 54:32B-8.12.

Other operators of cargo container storage and chassis repair and maintenance services in the Newark/Elizabeth area should look to this decision as precedent for challenging sales and use tax assessments.  [Note, the Division of Revenue has appealed the tax court’s ruling]