On February 19, 2019, New Jersey governor Phil Murphy signed into law significant enhancements to the state’s Family Leave Insurance (NJ FLI) and Temporary Disability (NJ TDB) laws. Here are the highlights of the changes that employers and leave administrators will need to know.
NJ FLI Entitlement Doubled
Beginning July 1, 2020, eligible employees will be entitled to 12 weeks of paid family leave in a 12-month period, up from the current six weeks of leave entitlement. In addition, when family leave is used intermittently, an employee will be able to use up to 56 days per leave year, an increase of 14 days from the current 42 days.
In addition, employees will be able to take a reduced leave schedule for up to 12 consecutive months for any one period of leave, as opposed to the current limit of 24 consecutive weeks.
Increased Monetary Benefit
Also effective July 1, 2020, the amount of the weekly benefit for both FLI and TDB will increase significantly. An employee’s weekly benefit rate is based on his/her average weekly rate (AWW). Currently, employees receive two-thirds (2/3) of their AWW. Under the newly amended law, the weekly benefit rate will increase to 85% of employees’ AWW. The increased maximum will result in significantly more money in employees’ pockets as the current maximum of $650 per week will rise to an estimated $859 per week under the new calculation.
Applicable to More Employers
As of June 30, 2019, employers with 30 or more employees for each calendar day of 20 or more calendar workweeks in the current or preceding calendar year will be subject to the NJ FLI, rather than the current threshold of 50 or more employees. This change will likely mean certain smaller employers who have not previously needed to offer this benefit will soon need to comply with the current FLI obligations.
Broadened Definition of Covered Family Members
Under the existing NJ FLI law, employees are entitled to use family leave to take care of a seriously ill or injured child, parent, spouse, or civil union partner. The amendment broadens that field of family members to include caring for siblings, grandparents, grandchildren, parents-in-law and anyone else related by blood or who is the “equivalent” of family. It also will cover foster children, foster parents and children born using a surrogate. Presumably, “any other individual related by blood to the employee” could include a long list of other family relationships including cousins, aunts, uncles, half-siblings, etc.
Increased Employee Contributions
Employees fund their own NJ FLI benefits through payroll deductions. Beginning in 2020, the taxable wage subject to contributions will increase significantly that could lead to an annual payroll deduction of approximately $100 for some employees, up from the current average of $33 annually.
These sweeping changes will mean increased benefits for New Jersey employees and more leave to administer for New Jersey employers. Prior to the 2020 effective date, employers should review their policies to determine if updates are needed to correspond to the expanded leave entitlements. Human resources professionals and supervisors should be informed of the changes to the law so that the longer leave periods may be effectively managed.