Law 360 reported that a New Jersey appellate panel sided with the city of Paterson in the city's dispute with police unions over how employee health contributions are calculated, ruling the state Legislature intended for an employee’s total pensionable salary to be used to calculate the contribution.
“In a published decision, a three-judge panel on the Superior Court of New Jersey’s Appellate Division ruled that Paterson properly calculated health contributions according to a contract with Paterson Police PBA Local 1 and its superior officers….
“The New Jersey Legislature failed to define “base salary” when it initially passed a trio of bills in March 2012 in response to a report from a joint legislative committee tasked with studying the reformation of public employee benefits. One of the committee’s recommendations was that employees be required to contribute 1.5 percent of base salary toward health insurance premiums, but the committee never provided the formula.
“According to the opinion, guidelines were later published by several state agencies, including the Department of the Treasury, the Division of Pensions and Benefits, the Department of Community Affairs and the Division of Local Government Services, which recommended the total pensionable salary formula adopted by Paterson.
“The appellate panel said that in addition to the formula’s appearance elsewhere, it considered the legislative intent, which was to reduce skyrocketing health care costs for employees, and in that light, the court favored Paterson’s method.”