N.J. Stat. § 40A:5-31
Any local unit may establish and maintain plans for award programs for employees, designed to promote efficiency and economy in government functions, to reward individual employees for meritorious performances and suggestions. Award programs may include any or all of the following:
A suggestion award program;
Awards for heroism;
An efficiency and incentive award program;
Awards for professional accomplishments;
Awards for service.
Any local unit shall have power and authority to make appropriations of money therefor, establish and make awards in the form of cash, medals, citation certificates, insignia or other appropriate devices to employees selected as recipients of awards by it or its committee appointed in accordance with programs established pursuant to this act. Such committee shall be known as the "Public Employees' Awards Committee" and shall consist of 5 persons who shall be officers or employees of the local unit, or members of the governing body, and no 2 of such officers or employees shall be employed in the same department of the local unit. Of the members first appointed to the committee, 2 shall be appointed for terms of 3 years, 2 for 2 years and 1 for 1 year, and thereafter appointments shall be made for terms of 3 years. Members shall serve for the terms for which they are appointed and until their successors have been appointed and qualified; a vacancy occurring by reason other than expiration of term shall be filled for the unexpired term. Members of the committee shall serve without compensation. The committee shall meet and organize as soon as practicable after the first appointment of members and annually, thereafter, on the call of the chief executive officer, and select a chairman from among its members. The committee shall hold regular meetings at least once each month during the year, except during July and August, at the call of the chairman or the chief executive officer of the local unit.
The committee is authorized to request, and shall receive, such assistance as it may require from any department, official or agency.
The committee shall be responsible for the formulation of programs and shall have the power to adopt and promulgate rules and regulations for the conduct and operation of awards programs.
The committee shall make an annual report to the governing body concerning the operation of awards programs established pursuant to this act.
N.J.S. § 40A:5-31