New Jersey Governor Signs Family Leave Insurance Legislation

On May 2, 2008, New Jersey Governor Jon S. Corzine signed an historic family leave insurance bill, propelling New Jersey to become only the third state in the nation to enact a family leave program for workers caring for sick family members, newborn and newly-adopted children. The state of California implemented its program in 2004 while the state of Washington passed legislation last year.

The bill signed into law extends the state’s existing Temporary Disability Insurance program to provide insurance benefits to all New Jersey workers when they take time off to care for newborn and newly adopted children, or sick family members. Parents can take paid leave any time during the first year after a child’s birth or adoption. Employees also can take leave to care for a seriously ill child, spouse, parent or domestic partner receiving inpatient care in a health care facility or under continuing supervision of a health care provider.

The new law:

• permits up to 6 weeks of leave for workers to provide care for a sick family member or care for a newborn or newly adopted child.
• allows workers to receive no more than two-thirds of their weekly pay, up to a maximum weekly benefit of $524 in 2008. The employer may require the employee take up to two weeks of available sick or vacation pay and workers must provide as much as 30-days advance notice of leave.
• requires no contributions from employers. The program is 100% funded by employee contributions, through a payroll deduction on the first $27,700 earned (in 2008). The deduction amounts to approximately $33 a year, or 64 cents a week.
• provides small businesses, (50 or fewer employees), with the option to replace employees receiving Family Leave Iinsurance benefits. Small businesses do not have to hold jobs open and provisions in the law allow small businesses, to fill a worker’s position with a permanent replacement without running the risk of being sued.
• aims to prevent fraudulent claims by using measures contained in the Temporary Disability Benefits Law, including criminal penalties and increased fines for those who improperly claim benefits. Employers receive notice when benefits are claimed and have the right to appeal eligibility determinations.
• ensures benefits would run concurrently with any leave provided under the New Jersey Family Leave Act and the federal Family and Medical Leave Act - not consecutively.
• offers employees the option to receive benefits intermittently.

Employee contributions will begin January 1, 2009 and benefits will be available July 1, 2009.

There is a waiting period of seven days before benefits begin; sick leave or vacation pay can be used during the waiting period.

The Department of Labor estimates that approximately 38,000 individuals – about 1 percent of New Jersey’s workforce – will collect benefits annually. Studies over the past four years in California show that 87 percent of those who collected benefits were parents of a newborn or newly-adopted child.