A New Jersey program that incentivizes unemployed people to return to work has only distributed a small fraction of its $10 million budget since it launched in late September, records obtained by Gothamist show.
The Return and Earn program was announced when the state’s unemployment rate remained alarmingly high at 7.1%. At the time, Gov. Phil Murphy said the program would give unemployed workers a $500 bonus and subsidize the costs of teaching them new skills at companies with 100 or fewer employees.
Murphy said he would allocate federal coronavirus aid money from the American Rescue Plan and pay 50% of new hire wages during a “training period” of up to six months, with a maximum of $10,000 per employee, and $40,000 per employer.
But payout totals obtained by Gothamist through a public records request show that just $289,400 was paid out in wage subsidies to businesses that hired 165 workers through the end of April. Most employers hired one or two workers, with just a handful hiring up to five, the records show.
The state Department of Labor said more than 4,200 employers asked about the program but not all of them met the requirements or are still developing training programs for new hires. Less than 3% are participating, the state said.
Employers told Gothamist many workers they recruited didn’t know about the program, or that they could acquire new skills and get a bonus. Other employers said there was a week-long lag to approve new hires, which often meant workers took jobs elsewhere. Some employees weren’t actively collecting unemployment benefits — which was initially prioritized by the state — and weren’t approved, employers said.
That means nothing, 170 employees brought back to work in a state where there are millions of job openings, come on.
Department of Labor spokeswoman Angie Delli-Santi provided updated totals and said $1.38 million had been “committed” to 117 employers and $86,000 paid out in bonuses to 172 employees hired through May 23rd. The DOL, however, did not say how much had been reimbursed to employers, many of whom complained about months-long delays in payments.
Still, Delli-Santi called the program a success.
“Employers are clamoring to fill vacancies. Return and Earn helps employers fill their employee/skills gaps, while incentivizing employees to return to the workforce and gain in-demand skills while they earn a paycheck. That’s the definition of an ongoing successful program,” she said.
She said the program remained open and employers can still apply for the remaining $8.6 million. Delli-Santi said the department was also considering expanding the pool of eligible employers. Companies are still struggling to fill vacant spots even though the state has recovered 95% of the jobs lost in March and April 2020 and the unemployment rate dropped to 4.1% in April, state numbers show.
Tom Bracken, president and CEO of the NJ Chamber of Commerce, called the number of workers hired under the program “peanuts.”
“That means nothing, 170 employees brought back to work in a state where there are millions of job openings, come on,” he told Gothamist in an interview.
“The intent was very laudable because it did provide back-to-work bonuses, it provided money to train people,” Bracken said, adding that the chamber advocated for the program. “But it's not working.”
Murphy spokeswoman Christi Peace said the governor’s office was assessing the program and finding ways to boost participation.
“The program will keep working toward the goal of assisting as many employers as possible in filling their employee or skills gaps and helping more residents return to the workforce as New Jersey continues on our road to economic recovery,” she said in a statement.
A mixed bag
Gothamist reached out to more than half of the companies that participated in Return and Earn and they offered mixed reviews.
Some said they were able to provide additional training to new hires and pay them more since Return and Earn required eligible employees to make $15 an hour, in line with legislation that progressively increase the hourly rate to $15 an hour by 2024.
“I have funds set aside to upskill them. From that regard, they are improving their skill set at the dime of the state,” said Andrew Winters, one of the owners of the daycare Dear World Academy in Hoboken. “For me, I have a better employee that I didn’t have to spend my own money to get.”
He said he hired at least three people who were approved to participate in Return and Earn but who didn’t show up or changed their mind about working at the daycare. But the program was worth it since it helped better train two employees who are still working at the daycare.
“We’re able to pay more because of the subsidy. We don’t reap a lot of the benefits but the staff person does,” said Rebecca Lynn, executive director of Assisted Living Inc. in Ewing, who hired three people through the program. “We are competing against nursing homes and other facilities who are able to get more money coming in.”
Still, Lynn said one hire showed up for a day and never came back.
“Wasn’t quite a game-changer,” added Mike Caputo, owner of Enviro-Master in Princeton, a cleaning company.
One of the issues raised by employers was the amount of time it took for the state to reimburse them.
“As a restaurant, being promised, ‘Oh, hire these people at this higher rate than you pay anyone else in your store, and we're going to reimburse you.’ But when?” said Cheri Bonvardo, owner of Saladworks in Clemington, who is still waiting for her reimbursement months after she joined the program. “I don't have this extra cash flow.”
She said the hires under the program were earning more than the longtime employees at her business.
Robert Lindo, co-owner of Carmesi, a fashion design studio in Guttenberg, said it took the state four months to reimburse him, but it was still worth the paperwork.
“It’s definitely an incentive to hire someone that doesn’t have all the training already,” he said.
Employers said some of the limitations of the program was that the DOL wasn’t approving hires that weren’t actively collecting unemployment, disqualifying candidates that were unemployed but not receiving benefits.
Delli-Santi said while they initially prioritized people receiving unemployment to get people laid off during the pandemic back to work, all unemployed career seekers are eligible for the program.
Bracken, from the Chamber of Commerce, suggested boosting the $500 bonus to $1,000 to further incentivize workers.
“The pencil needs to be sharpened. And it needs to be something that has significance, and has characteristics that make it work,” he said. “For whatever reason, the way it's written is not being embraced. That's why we need to tweak it.”