NJ Family Leave and Disability Insurance Update

January 21, 2020

New Jersey’s Family Leave Insurance (FLI) and Temporary Disability Insurance (TDB) laws were expanded in 2019 and the changes are phased in over a two year period. As a result of the expansion, employee contributions are increased in order to fund the programs. This Update addresses what is new and what is different and the timing for certain changes. See the NJ “My Leave Benefits” website for more information for employers and employees, including answers to Frequently Asked Questions, and contact numbers and links to the NJ Division of Temporary Disability and Family Leave Insurance.

NJ’s Family Leave Insurance program partially replaces the wages of workers who need to miss work to care for a seriously ill or injured family member, or bond with a newborn or newly adopted child. The program complements NJ’s Temporary Disability Insurance program, which partially replaces wages during an employee’s own injury, illness, or other disability, including pregnancy. Every employer in NJ must provide TDB benefits, unless an exemption applies. FLI wage replacement benefits are funded by employees through payroll deductions, and the funding rates are subject to change over time. Employers are responsible for deducting employee contributions from workers’ weekly wages and remitting those contributions to the state for the state-run FLI and TDB programs.

• Effective January 1, 2020, the maximum taxable wage base is increased from $34,400 to $134,900. The employee contribution rate for TDB will increase from .17% to .26% of an employee’s taxable wages with an estimated maximum annual contribution of $350.74, up from $58.48. For 2020, employers contribute between $35.30 and $264.75 on the first $35,300 earned by each employee during the calendar year. For January 1-June 30, 2020, the maximum weekly benefit is $667, and as of July 1, 2020, the maximum weekly benefit increases to $881.
• The FLI contribution rate of .08% is set to increase to .16% of employees’ wages up to an estimated maximum annual contribution of $215.84, up from $27.52.

Note too that NJ’s Family Leave Act (FLA) entitles eligible employees to unpaid, job-protected leave from work for certain family reasons. As of June 30, 2019, NJ employers with 30 or more employees are subject to these leave requirements. Although employee leave under the FLA is unpaid, eligible employees may receive partial wage replacement benefits under the NJ FLI program. NJ also requires employers with employees in NJ to provide one hour of paid sick leave for every 30 hours worked. For employers that have been subject to one or more local NJ ordinances, the new law eliminates the varying sick leave requirements that have existed for years. See our NJ Sick Leave Update for more information.

Changes to the NJ FLI

• As of February 19, 2019, NJ expanded the definition of “family member” to cover more people, eliminated the 7-day waiting period for FLI benefit, and expanded a few other FLI provisions.
• As of July 1, 2019, short, intermittent FLI claims are allowed. Workers who only claim a few days at a time for caregiving or bonding will be paid for those days after a week, even if they don’t claim additional days. (Previously, if they didn’t take additional days within a certain time frame, those first days would not be paid.)
• As of January 1, 2020, workers will notice higher payroll deductions for FLI. As of January 1, 2020, workers contribute 0.16% of the first $134,900 earned during the calendar year. That means workers who do not earn $134,900 in a year continue to have deductions taken out year-round. The most a worker can contribute for 2020 is $215.84.
• As of July 1, 2020, workers will be able to claim up to 12 consecutive weeks of FLI benefits during a 12-month period (up from six weeks). Workers who take intermittent days for caregiving or bonding will be able to claim benefits for up to 56 days, up from 42 days. Also, the maximum weekly benefit rate will be calculated at 85% of a claimant’s average weekly wage, up to a maximum of $881 per week, and workers with more than one job will have the option to take leave from one employer while continuing to work for another. Their weekly benefit rate will be based only on wages from the employment from which they are taking leave. 

Changes to NJ TDB 

• As of January 1, 2020, workers will notice higher payroll deductions for TDB. As of January 1, 2020, workers contribute 0.26% of the first $134,900 earned during the calendar year. That means workers who do not earn $134,900 in a year continue to have deductions taken out year-round.  The most a worker can contribute for 2020 is $350.74.
• Effective June 17, 2020, NJ TDB will allow employees to return to work on a reduced schedule and be eligible for partial disability benefits, provided their employer is agreeable. The benefits will last up to eight weeks, or up to 12 weeks if medically warranted.
• As of July 1, 2020, the maximum weekly benefit rate will be calculated at 85% of a claimant’s average weekly wage, up to a maximum of $881 per week.

Employers should confirm with their payroll vendors that their systems are updated to administer the appropriate TDB and FLI payroll deductions. And given the continued expansion of state leave and disability-related laws, employers will want to work with their labor law and leave/disability advisers to develop processes to track both paid time off and unpaid time off correctly and comply with the various state and federal leave laws. Updates to current company leave policies/employee handbooks may also be needed. Employers should also keep in mind that many laws protecting employees on leave or replacing wages on leave, including most state laws, do not require or provide for continuation of employee benefits during leave periods.

We will continue to provide updates on NJ benefits related rules as further information becomes available. Conner Strong & Buckelew is not a qualified wage and labor advisor and does not assist with general federal leave or state leave policy design or administration. Clients should continue to consult with qualified wage and labor advisors, human resources professionals, or their counsel for instructional guidance on leave policy design and assistance with general and complicated leave administration issues. Please contact your Conner Strong & Buckelew account representative toll-free at 1-877-861-3220 with any questions. For a complete list of Legislative Updates issued by Conner Strong & Buckelew, visit our online Resource Center.