A2241

An Act concerning early childhood educators and supplementing Title 30 of the Revised Statutes.

Be It Enacted by the Senate and General Assembly of the State of New Jersey:

1. The Legislature finds and declares:

a. The childcare workforce plays a critical role in the State by providing foundational education and skills development for children, while supporting working parents. Despite their indispensable role, childcare and early learning workers in the childcare setting - who are predominantly women of color and immigrants - consistently face low wages compared to workers in other sectors, with limited access to health insurance, retirement plans, and other essential employment benefits.

b. The childcare industry is a critical component of the State’s local economy and societal functioning. While heavily regulated, childcare providers often operate without any supplemental public assistance. Without sufficient support, these small businesses - many of which are owned by women - struggle to maintain operations and sustain sufficient staffing levels, directly impacting parents' ability to participate in the workforce and the availability of quality early education for children.

c. Investing in the childcare industry is essential to the economic stability and well-being of New Jersey's families and communities, and a robust childcare system starts with a strong and thriving workforce. Increasing the wages of early child educators in the childcare setting to better reflect the wages of their counterparts in the public school setting will enable New Jersey to better support this critical workforce, reduce economic inequality in accessing quality early childhood learning, and promote long-term prosperity for the childcare industry.

2. As used in this act:

“Child development facility” means a child care provider operating a facility licensed pursuant to the provisions of P.L.1983, c.492 (C.30:5B-1 et seq.) or a family child care provider registered pursuant to P.L 1987, c. 27 (C.30:5B-16), to provide child care services to children, infants, and toddlers. “Child development facility” does not include a public or private elementary or secondary school engaged in legally required educational and related functions or a pre-kindergarten or preschool education program.

“Child Development Facility Payment Formula” means the formula established pursuant to subsection b. of section 4 of this act.

“Department” means the Department of Human Services.

“Early childhood educator” means an individual who is employed by a child development facility and, in that capacity, is involved directly in the care, development, and education of children age five and under, infants, and toddlers.

“Early Childhood Educator Salary Scale” means the salary scale established pursuant to subsection c. of section 4 of this act.

“Grow NJ Kids” means New Jersey’s quality rating and improvement system for child care and early learning providers, which rates the quality of child care services offered at participating providers based on measurable quality metrics, and offers participating providers training and incentives to improve child care services.

“Program” means the Early Childhood Educator Pay Equity Program established pursuant to section 3 of this act.

3. There is established in the Department of Human Services, in collaboration with the Department of Children and Families, the Early Childhood Educator Pay Equity Program. This program shall provide grant payments to child development facilities to increase the minimum compensation for early childhood educators based on the educator’s degree and position title.

4. a. To implement the program the department shall:

(1) establish and periodically update the Child Development Facility Payment Formula;

(2) provide guidance to child development facilities participating in the program on how to equitably differentiate early childhood educator salaries above the minimum salaries required in the Early Childhood Educator Salary Scale;

(3) establish requirements for child development facilities participating in the program to receive grant payments in an amount determined by the Child Development Facility Payment Formula;

(4) execute contracts or agreements with child development facilities participating in the program to govern department distribution, and facility use and administration, of grant payments, which contracts or agreements shall:

(a) be renewed not less frequently than once every three years;

(b) describe the Child Development Facility Payment Formula as it applies to payments issued to the child development facility;

(d) state the requirements for a child development facility to participate in the program and any remedies for failure to meet the requirements; and

(e) specify reporting and auditing requirements for a child development facility participating in the program; and

(5) ensure that all early childhood educators employed at child development facilities participating in the program are paid regular wages or salaries that meet or exceed the minimum salaries established in the Early Childhood Educator Salary Scale.

b. (1) The department shall develop a Child Development Facility Payment Formula to determine the amount of grant payments issued to a child development facility participating in the program that enters into a contract or agreement with the department to implement the minimum salaries specified in the Early Childhood Educator Salary Scale.

(2) The Child Development Facility Payment Formula shall:

(a) incorporate the estimated cost for a child development facility to implement the minimum salaries required in the Early Childhood Educator Salary Scale; and

(b) account for valid and reliable indicators regarding the economic need of children, families, and the surrounding community associated with a child development facility, in order to direct increased funding under the formula to child development facilities serving families and communities with limited economic resources.

c. (1) The department shall annually establish the Early Childhood Educator Salary Scale, which shall serve as the basis for the minimum salary a child development facility participating in the program is required to pay early childhood educators employed by the facility. The department shall base the salary scale on the educator’s degree, years of experience, and title. The salary scale shall provide for pay parity between early childhood educators employed in child development facilities and comparable educators employed at public schools within the State.

(2) In the event that funds available for grant payments issued under the program are insufficient to cover the costs to implement the Early Childhood Educator Salary Scale, the department may do any combination of the following:

(a) reduce grant payment amounts, as determined according to the Child Development Facility Payment Formula, to child development facilities to align with the availability of funds, and issue guidance to facilities for adjusting implementation of the Early Childhood Educator Salary Scale for a specified time period; or

(b) reduce the number of child development facilities receiving grant payments under the program, in which case the department shall prioritize funding to child development facilities receiving subsidy payments under the New Jersey Child Care Subsidy Program administered by the Division of Family Development in the department.

5. a. The department shall consider a child development facility for participation in the program upon the submission of an application to the department by the child development facility on a form and in a manner prescribed by the department.

b. At a minimum, a child development facility shall be required to enroll in Grow NJ Kids, if not already enrolled, and to agree to pay eligible early childhood educators employed at the facility salaries that meet or exceed the minimum salaries established in the Early Childhood Educator Salary Scale in order to participate in the program.

c. The department may design a waiver process to exempt child development facilities from the provisions of subsection b. of this section if the facility can demonstrate insufficient revenues to meet the minimum salaries established in the Early Childhood Educator Salary Scale for all applicable staff.

6. There is established in the Department of Human Services a non-lapsing fund that shall be known as the Early Childhood Educator Pay Equity Fund. The fund shall consist of any funds that are appropriated by the Legislature for inclusion in the fund, investment earnings of the fund, and moneys contributed to the fund by private sources. The moneys in the fund shall be invested and reinvested by the Director of the Division of Investment in the Department of the Treasury. Expenditures from the fund shall be exclusively for the purpose of implementing the provisions of this act.

7. The Commissioner of Human Services shall adopt rules and regulations, pursuant to the “Administrative Procedure Act,” P.L.1968, c.410 (C.52:14B-1 et seq.), to effectuate the purposes of this act.

8. This act shall take effect 180 days after the date of enactment, except that the Commissioner of Human Services may take any anticipatory administrative action in advance as shall be necessary for the implementation of this act.

STATEMENT

This bill requires the Department of Human Services (department), in collaboration with the Department of Children and Families, to establish and administer the Early Childhood Educator Pay Equity Program, and establishes the Early Childhood Educator Pay Equity Fund to be the repository of State funds appropriated, and any private funds available, for this program’s purpose. The goal of the program is to provide funds to child development facilities to increase the minimum compensation for early childhood educators employed by those facilities, based on the educator’s degree, years of experience, position title.

Child care providers in New Jersey are primarily funded through parent-paid tuition, which is set by providers based upon market analysis, not on the actual cost of delivering high-quality care. Additionally, low-income families may receive financial support through the New Jersey Child Care Subsidy Program, with these subsidies only covering only about 75 percent of the market rate for care. As a result, neither parent-paid tuition nor State subsidies cover the true cost of high-quality early education and care. This leaves providers operating on razor-thin margins, unable to offer competitive wages to educators without cutting non-salary costs or significantly raising tuition for families.

The child care industry, however, is a highly regulated industry, and providers risk compromising health and safety standards and their State licensure if certain costs are reduced. Conversely, raising tuition would make child care unaffordable for most families and precluded participation in the Child Care Subsidy Program, leaving low-income families without care options.

It is the sponsor’s belief that is not sustainable for the child care industry in New Jersey to remain both heavily regulated and primarily funded by working families—at the expense of the early care and education workforce. This bill provides the public investment that is urgently needed to sustain child care providers, as well as the workforce that delivers these critical services to New Jersey families.

Under the bill, a “child development facility” means a child care provider or a family child care provider. An “early childhood educator” is defined to mean an individual who is employed by a child development facility and, in that capacity, is involved directly in the care, development, and education of infants, toddlers, or young children age five and under.

To implement the program, the department is to annually specify the minimum salaries paid to early childhood educators under the program in the Early Childhood Educator Salary Scale, which is to be based on an educator’s position, years of experience, and degree, and is to provide for pay parity between early childhood educators employed in child development facilities and comparable educators employed at public schools within the State.

The department is also mandated to establish and periodically update the Child Development Facility Payment Formula used to determine the grant payments issued to participating child development facilities. The formula is to incorporate the estimated cost for a child development facility to implement the Early Childhood Educator Salary Scale, and provide increased funding to child development facilities serving families and communities with limited economic resources.

In the event that funds available are insufficient to cover the costs of the program, the department may do any combination of the following: reduce grant payments to participating child development facilities to align with the availability of funds and issue guidance to facilities for adjusting implementation of the Early Childhood Educator Salary Scale; or reduce the number of child development facilities receiving grant payments, in which case the department is to prioritize funding to facilities receiving subsidy payments under the New Jersey Child Care Subsidy Program.