Time Off, With More Pay: New Jersey Expands Family Leave Entitlements

On February 19, 2019, Governor Phil Murphy signed an amendment into law that increases entitlements under the state’s paid temporary disability and family leave law. The new law significantly expands employee’s time off, provides higher wage reimbursement for taking leave, covers more family members, and expands job protections when taking family leave.

How long is an employee entitled to benefits, and what is the rate of payment?

The new law increases Family Leave Insurance (FLI) and Temporary Disability Insurance (TDI) payments, which are wage replenishments due when an employee takes time off from work to bond with a newborn or care for a sick loved one.

For leave periods beginning on or after July 1, 2020, the amount of weekly FLI and TDI benefits will increase to 85% of an employee’s pay, capped at a maximum payout of $860 per week. This is a major increase to the current scheme, which allows an employee to receive two-thirds of their pay, up to a maximum amount of $650 per week.

Beginning July 2020, protected continuous leave for the care of a newborn or to care for a sick family member will double from 6 to 12 weeks and intermittent leave will increase from 42 to 56 days. Currently, employees are only able to take up to 6 weeks of FLI or TDI in a 12-month period.

New permissible reasons for leave

In addition to increased leave time and wage replacement pay, the law also expands the permissible reasons that an employee may take leave. For example, the law now applies to victims of domestic and sexual violence. An employee may take leave necessary due to the employee’s status or the employee’s family member’s status as a victim of domestic violence or sexual assault.

An employee may still take leave for a serious health condition of the employee or the employee’s family member, for family leave, and for temporary disability leave. However, the law expands the definition of “family member” to include domestic partners, grandparents, grandchildren, siblings, adult children, in-laws, as well as any “individual that the employee shows to have a close association with the employee which is the equivalent of a family relationship.” The expansion significantly increases an employee’s ability to collect family leave insurance.

In addition, while the law currently permits payment when an employee takes leave for the birth or adoption of a child, the amendments will modernize the law by allowing an employee to receive payment during other types of family expansion, including foster care placement, surrogacy or children conceived through a gestational carrier agreement.

Who will be covered?

Effective June 30, 2019, more employees will be eligible for family leave insurance. The new law provides job protected entitlements to employees who work for a business with 30 or more employees for each working day during each of 20 or more calendar workweeks in the then current or immediately preceding calendar year, reduced from the current threshold of 50 or more employees.

Payments

While under current New Jersey law, an employee must endure an unpaid “waiting period” between the employee’s last day of work and the employee’s first entitlement to payment for family temporary disability insurance, the new amendments eliminate the waiting period. Starting on July 1, 2019, benefits will be payable the first day of leave. However, family temporary disability insurance will not be paid simultaneously with any paid sick leave, vacation time, or other leave provided at full pay from the employer. The new law no longer allows employers to require that employees use all their paid leave, up to 2 weeks, before the payment of benefits. However, employers may give employees the option to use other employer-provided paid time off before the employee uses disability benefits.

Employees will bear the financial burden for the entire cost of the expansion through increases in employee FLI and TDI wage tax assessments.

Penalties

The new law increases penalties that must be paid by the employer for violations of the law. Specifically, employers who fail to provide notifications and disclosures, as required will be fined up to $1,000 and in certain cases imprisoned for up to 90 days. A refusal by an employer, or an agent of an employer, to permit the New Jersey Department of Labor to inspect or copy records, or who fails to provide any notification or disclosure to the DOL or the employee, will be liable for a fine of $250.

Notably, the new law also explicitly forbids employers from retaliating against an employee for taking leave and for refusing to restore the employee to his/her job following a period of leave on the basis that the employee requested or took any temporary disability or family leave benefits. First time violations will cost employers up to $2,000 and each subsequent violation will cost up to $5,000. Employers will also be required to reinstate the employee to the same position or to a position equivalent to that which the employee held prior to the discharge or retaliatory action, compensation for lost wages and benefits, and payment of the employee’s attorney’s fees and costs.

Bottom Line

The new anti-retaliation provision goes into effect on June 30, 2019, and employees will begin to receive increased benefits on July 1, 2020. Businesses with 30 to 50 employees must begin to incorporate compliance into current payroll and leave policies, as well as begin to comply with the law’s notice requirement. Regardless of size, all employers should work closely with legal counsel to ensure employee handbooks and policies are in compliance with and accurately reflect the new amendments.