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October 21, 2011

Re:   Guidance Issued on the new employee State residency requirement - "New Jersey First Act"

Dear Mayor:

As we noted in our July 26 Dear Mayor Letter, effective September 1, 2011 all public employees and officers at all levels and types of New Jersey government agencies must reside in New Jersey, with noted exemptions below.  Today, the Division of Local Government Services issued Local Finance Notice 2011-30 summarizing the key elements of the law and providing interpretative guidance on its application.

P.L. 2011, c. 70 requires that "every person holding an office, employment or position" in the State of New Jersey shall have their "principal residence" in the State of New Jersey.  The law did provide for the following exemptions:

1.         Employees hired on or after September 1, 2011 who are not a resident of New Jersey when hired receive a one year exemption.  If they fail to establish residency within one year, they shall be deemed unqualified for holding the office, employment or position.
2.         Employees, officers and appointees hired before September 1, 2011 who did not meet the residency requirement are exempted unless they break public service for a period of time greater than seven days.
3.         Specific situations at higher education institutions
4.         People employed by the State whose work requires them to be out-of-state for the majority of their working hours.
5.         Exemptions granted on the basis of critical need or hardship.  A committee will be established to grant such exemptions.  At this time procedures for filing for hardship exemptions have yet to be developed. 

The law defines “principal residence” to mean:

1.         where the person spends the majority of his or her non-working times, and
2.         which is most clearly the center of his or her domestic life, and
3.         which is designated as his or her legal address and residence for voting.

The Local Finance Notice contains a list of Frequently Asked Questions such as:

Can a current employee who lives in New Jersey move out of state after the effective date of the law?

No. The language cited above, that a person who holds employment but does not have residency in New Jersey on the effective date of the act shall not be subject to the residency requirement, requires that all others are subject to the requirement.  This includes any person who was a New Jersey resident on the effective date of the act but then later moved out of state.

Will a current employee be able to apply for an "exemption" to move out of state after the effective date of the new law?

Yes.  The employee will be able to request an exemption from the applicability of the law on the basis of "critical need or hardship" from the committee.  The law does not limit the ability to apply to the committee for an exemption to only non-residents or new hires.  However, if a current employee desires to move out of state, he should apply in advance for an exemption, rather than move and then ask for the exemption, since once the current employee moves out of state, the law applies to him.

What constitutes a "break in public service" under the new statute which triggers the residency requirement for current employees?

The statute does not define "break in public service."  The Civil Service Commission has proposed regulations, which include a definition of a break in public service for purposes of the new law as "an actual separation from employment for more than seven calendar days due to such causes as resignation, retirement, layoff, or disciplinary removal.  A leave of absence or a resignation/new appointment pursuant to N.J.A.C. 4A:4-7.9 shall not be considered a break in public service."  This definition can reasonably be applied to all local units.

How should employees be removed from employment for failure to satisfy the residency requirement?

Employers may, if they so choose, develop an internal process which gives employees notice and opportunity to be heard when an action to remove them for failure to satisfy the residency requirement is contemplated, however such a process is not required under the law.  If such a process is developed, it must be followed consistently in all residency removal actions.  In the event the employer does not act to remove an employee who is not a New Jersey resident, the statute provides that any officer or citizen may bring an action in Superior Court for a judgment to oust the unclassified employee from his position.

What is the role of the employer in applying for an exemption from the residency requirement on behalf of an employee?

The statute allows an employee to request an exemption from the provisions of the residency law "on the basis of critical need or hardship."  It provides that "any person" may request the exemption.  If the employer wishes to assist in the exemption application process on behalf of the employee, it may do that, but the law does not require its involvement.  The employee can apply individually and present the case regarding critical need or hardship to the committee.

The Civil Service Commission is issuing guidance on the law to Civil Service municipalities.  The Commission is also proposing rule amendments that will make existing rules consistent with the new law. 

In addition, the Division has added information regarding the new law to their website under Financial Administration. 

Each municipality should carefully review the law with their legal counsel, advise employees of the law and update personnel manuals and procedures.  In addition, job advertisements for new employees should inform applicants of the residency requirements.

Very truly yours,

William G. Dressel, Jr.

Executive Director

 

 

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