April 1, 2020

Coronavirus Legal Issues Update – N.J. Coronavirus Legislation Signed into Law

Last week, Governor Murphy signed into law three bills aimed to respond to the COVID-19 pandemic that directly affect New Jersey businesses. Effective immediately, these bills add protections to employees who miss work due to an infectious disease or having to care for an infected family member, and provide for grants to businesses during periods of emergency. Other legislation affecting businesses, including that which would extend the April 15 tax deadline to July 15th and provide compensation to workers for lost wages, are expected to be signed into law in the coming weeks.

Bills Effective Immediately

Family Leave and Disability Benefits

            On Wednesday night Governor Murphy signed into law bill no. S2304 to expand New Jersey’s Temporary Disability Insurance (TDI) and Family Medical Leave Insurance (FMLI) programs to provide more workers with access to paid leave benefits during public health emergencies. The bill provides that workers who become sick from the coronavirus or must care a sick family member will be eligible for state paid leave benefits. 

The bill expands the law’s definition of a “serious health condition” during an emergency so that workers are eligible for TDI and FMLI benefits if they or a family member have been exposed to an infectious disease and must quarantine. The bill also increases New Jersey’s earned sick leave law to permit the use of earned sick time for isolation or quarantine recommended or ordered by a provider or public health official because of suspected exposure to a communicable disease, or to care for a family member under recommended or ordered isolation.

Under the bill, New Jersey workers can receive up to six weeks of benefits at two-thirds of their pay, capped at $667 per week, which will increase to twelve weeks as of July 1.

Prohibition Against Firing Workers

Now effective, A3848/S2301 prohibits an employer, during the ongoing Public Health Emergency and State of Emergency declared by the Governor, from terminating or refusing to reinstate an employee who has, or is likely to have, an infectious disease which requires the employee to miss time at work. Under the bill, an employee who requests or takes time off from work based on the recommendation of a medical professional may not be terminated or refused reinstatement if the employee is likely to infect others in the workplace.

An employer that violates the law can be ordered to reinstate the employee to his or her former position with no reduction in status, benefits, or pay, and is subject to a fine in the amount of $2,500 for each violation.

The bill does not specify whether reinstatement must be to an equivalent position with the same general duties, compensation and benefits—which is required under the New Jersey Family Leave Act and the federal Family Medical Leave Act.  Presumably, the Commissioner of Labor in enforcing these new laws will look to New Jersey’s current laws, for clarification and guidance. 

Grants to Small Businesses

Also effective immediately, A3845/S2284 authorizes the New Jersey Economic Development Authority (EDA) to provide grants during periods of emergency and for the duration of economic disruptions due to an emergency. The EDA will be able to offer grants for the planning, designing, acquiring, constructing, reconstructing, improving, equipping, and furnishing of a project, including grants for working capital and meeting payroll requirements. The legislation also allows the chief executive officer of the EDA to extend business document submission deadlines during a period of emergency.

Bills Yet to Be Signed

Tax Filing Extensions

 Upon signing, A3841/S2300 will extend the April 15 tax deadline to July 15,2020 for income and corporate business taxes.  Under the bill, taxpayers will not face penalties or interest if their tax return is filed by the end of the specified extension.

Murphy has stated that the delay in finalizing this legislation is due to “a number of moving parts”, such as how the state will pay its own bills, as well as the amount of federal support. At a press conference on Wednesday, April 1, Murphy confirmed the July 15th deadline. Meanwhile, the federal tax filing extension has already been extended. The new deadline for filing federal income taxes and making payments is July 15th as well.

Compensation to Workers for Lost Wages

A3846/S2293 will establish a $20 million temporary unemployment insurance program to compensate workers for wages lost while they are in quarantine due to the outbreak, as well as to compensate businesses who pay wages to workers who are ordered quarantined.  To the extent funds are available, the fund will provide monetary relief to individuals for actual lost wages in an amount that is equivalent to the individual’s average weekly rate of compensation from the past calendar year, if individuals do not have fully paid leave, and the individual suffers actual loss wages as a result of coronavirus due to:

(a) the individual’s absence from work due to the need to care for a family member;

(b) the individual’s absence from work due to the illness of the individual;

(c) the individual’s absence from work due to a school or childcare facility being closed; and 

(d) for such other purposes as determined by the Commissioner.     

Employees are prohibited from collecting payments under this bill during any period in which the employee is collecting benefits under the unemployment compensation law.  

The fund will also be used to assist employers who pay wages to workers who are ordered under quarantine by a licensed healthcare practitioner as a result of coronavirus.  

SPSK will continue to monitor legislative developments at the state, federal and local level, and will provide further updates on future legislative enactments.  If you have any questions about the laws referenced in this Alert, please contact the authors at jmj@spsk.com or rjr@spsk.com.

DISCLAIMER:  This Alert is designed to keep you aware of recent developments in the law.  It is not intended to be legal advice, which can only be given after the attorney understands the facts of a particular matter and the goals of the client.

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