NJ has a very tough anti bullying law that went into effect in September.
NJBullying.org While it's ridiculous that first graders get suspended for saying a classmate "has cooties", it's entirely reasonable to expect a higher standard from the teachers.
I'm not sure what needs to be "investigated" since the incident was captured on the student's phone. It seems pretty cut and dry, and no matter what the student may have said or done to rile up the teacher, the teacher is an adult and the student is a child. Kids are always going to push and see what they can get away with, but from what I see in this video clip, the teacher comes across as immature and vindictive.
If the school has any doubts, UNPAID leave should be allowed until they finish their "investigation". The teacher being on paid leave sends the wrong message to the students, the teachers, and the community in general.
If this had happened in a different work environment, the teacher would've been fired immediately. A coworker of mine was fired yesterday for calling a customer an asshole (and the customer really was an ass), but allowing the teacher to ridicule, threaten, as well as use vulgarity in front of a class of special needs students and keep his job? It's just wrong.