Upcoming Important Changes to New Jersey Paid Family Leave Insurance

New Jersey is one of only six states that offer certain employees paid family leave which is funded through payroll deductions.  On February 19, 2019, New Jersey Governor Phil Murphy signed legislation that expands the benefits under the Paid Family Leave Law and Temporary Disability program in New Jersey.

First, as of June 30, 2019, the amended law expands the scope of employees eligible for family leave insurance to include employees who work for employers with 30 or more employees.  Prior to the new legislation, coverage was limited to employees of employers with 50 or more workers.

Second, the law expands the permissible reasons that an employee will be entitled to paid family leave insurance.  Under the new law, the definition of “family member” has been expanded to include grandparents, grandchildren, siblings, adult children, in-laws, domestic partners, and individuals having a close relationship with the employee that is the equivalent of a family relationship.  The amended law also permits coverage to bond with a child resulting from foster care placement, surrogacy, or through a gestational carrier agreement.  In addition, coverage is also provided to victims of domestic and sexual violence and to those caring for family members who are dealing with issues related to domestic or sexual assault.

Third, paid family leave has been increased from 6 weeks to 12 weeks beginning on July 1, 2020.  Intermittent leave will also increase from 42 to 56 days.

Fourth, the requisite waiting period before entitlement to family leave insurance payments begins has been eliminated.  Starting July 1, 2020, benefits will be payable to the employee on the first day of leave.  While employees may have the option to use either paid time off before using family leave benefits, employers can no longer require that employees use all of their paid leave before the payment of benefits.

Fifth, effective July 1, 2020, the weekly benefit to employees has been increased to 85% of an individual’s weekly wage, capped at 70% of the state’s average weekly wage so that eligible employees can receive up to a maximum payout of $860 per week.  Prior to this increase, employees were only entitled to receive two-thirds of their pay up to a maximum of $650 per week. This expanded benefit also increases the amount that all eligible employees will have to pay to fund the program.

Sixth and last, effective June 30, 2019, the amended law prohibits employers from retaliating against employees who request and/or take paid family leave.  The law also prohibits employers from refusing to restore the employee to his or her job on the basis that the employees requested or took family leave benefits.  Employers who fail to provide notifications and disclosures will be subject to fines up to $1000 may be imprisoned for up to 90 days.  Employers who violate the anti-retaliation provisions will be subject to fines up to $2000 for first-time violations and thereafter $5000 for each violation.  The anti-retaliation provision and fines also imply to employees eligible for paid temporary disability leave.

Companies that employ between 30 and 50 employees should prepare to implement these changes.  If you require assistance regarding compliance with the New Jersey Paid Family Leave Insurance Law or have any questions regarding these changes, please contact Jennifer Myers Chalal at jchalal@lawsgr.com or (215) 241-8817.

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