On February 19, 2019 Governor Murphy signed legislation enhancing paid family leave for New Jersey employees. In 2008, New Jersey became the third state to offer paid family leave insurance (FLI) after enacting legislation amending the New Jersey Temporary Disability Law. Only five other states, plus the District of Columbia, have paid family leave.  The new law will provide New Jersey employees with some of the most expansive paid leave coverage in the country in that it would increase the amount of time workers could take leave, raise the amount of weekly benefits, and expand the program to employees of smaller employers.  The increased cost of the bill’s benefits will be funded by an increase in payroll taxes.

Under the current family leave insurance program, eligible employees can receive up to six (6) weeks of benefits equal to two-thirds of their pay, with a maximum benefit of $633 per week in paid leave benefits. Starting on July 1, 2020, eligible employees can take up to 12 weeks of leave and receive up to 85% of their wages (with a cap of $859 per week). The new law expands the purposes for which employees can take paid leave by redefining “family members”.  The definition of “family members” will allow employees to take paid leave to care for grandparents and grandchildren, siblings, adult children, and in-laws.  The law also provides FLI benefits to a worker providing care for an individual whose close association is the equivalent of a family member.  However, the worker is required to give evidence of that association.  The new law provides paid leave benefits for domestic violence or sexual assault survivors and their family caregivers. It also expands the definition of family members under the New Jersey Family Leave Act (NJFLA) and under the New Jersey Security & Financial Empowerment Act (NJ Safe Act), which provide benefits to employees and their families who are the victims of domestic or sexual violence.

Advocates of the new law say that the current family leave program is underutilized because employees are unaware of their right to take leave, believe they will lose their jobs if they take leave or cannot afford the lower weekly benefits. The stated purpose of the new law is to protect workers against the hardships generally caused by involuntary unemployment, as it provides benefit payments to replace wages lost when a working family member must take time away from work to care for family members who are unable to care for themselves. Opponents argue that the new law will adversely impact smaller businesses, since the it lowers the exemption threshold, expands eligibility for paid leave, and increases the leave period to 12 weeks during any one year and the maximum intermittent FLI leave from 42 to 52 days.  Smaller employers may need to hire replacement workers or pay overtime for the longer duration of leave.  As of June 30, 2018, the new law will apply to employers with 30 more employees, whereas the current law only applies to employers with 50 or more employees.

The leave provided under the new family leave insurance program is not protected leave. Unlike the NJFLA and the NJ Safe Act, the family leave insurance program does not require employers to provide employees returning from paid family leave with the same or a comparable position.   However, given the interplay of family leave insurance with other laws including New Jersey’s paid sick leave law, the federal Americans with Disabilities Act, and the New Jersey Law Against Discrimination, employers are well-advised to consult with labor & employment counsel before terminating any employee who is out on leave under the family leave insurance program.