On February 19, 2019, New Jersey Governor Phil Murphy signed a new bill that significantly expands paid family leave in New Jersey. The new law (A3975) modifies two existing New Jersey laws to make them more employee-friendly: (1) the New Jersey Family Leave Act (“FLA”); and (2) New Jersey paid family leave insurance program (“FLI”). Before summarizing the impact of this new law, here is a recap of these two laws, as they stood prior to the passage of the new law:
The FLA – Unpaid Job Protection
The FLA, passed in 1989, currently applies only to employers with 50 or more employees – the same threshold that applies to the federal Family and Medical Leave Act (“FMLA”). The FLA, like the FMLA, provides for job protection for leaves of up to 12 weeks, but does not provide wage replacement. In other words, the FLA is a form of job-protected unpaid leave. Like FMLA leave, FLA leave can be taken on an intermittent basis when caring for a family member with a serious health condition, but under the current FLA, intermittent leave can only be spread out over a maximum of 24 weeks. Both laws require employees to be restored to their prior position (or a substantially equivalent position) upon the expiration of leave, and prohibit retaliation for the use of leave.
Unlike the FMLA, the FLA can only be used by employees to care for newly born or adopted children or certain family members – not the employee’s own medical condition. In the case of bonding with children or caring for family members, FMLA and FLA leave can run concurrently, and employees will only end up with 12 weeks of total leave per year. However, there are some scenarios where employees can use FMLA and FLA to take more than 12 weeks of total leave. For example, if an employee uses FMLA for their own qualifying medical condition, he or she can later take a separate period of FLA to care for a qualifying family member.
The FLI Program – Paid Benefits
The FLI program, passed in 2008, currently provides for up to 6 weeks of partial income replacement for employees caring for family members requiring medical care, or bonding with new children. Benefits are paid at the rate of two-thirds of a claimant’s average weekly wage, subject to a cap of $650 per week. Up to 42 days of FLI leave can currently be taken on an intermittent basis. FLI benefits are 100% funded by employee contributions, and employees of employers of all sizes can seek FLI benefits.
The Impact of the New Law on the FLA
The new law expands the scope and reach of unpaid FLA in several ways.
First, the new law requires smaller employers to provide FLA leave. Beginning on June 30, 2019, employers with 30 or more employees will be subject to the FLA. This means that New Jersey employers with less than 50 employees, who are not subject to the FMLA, will need to provide up to 12 weeks of job-protected family leave under the FLA.
Second, the new law expands the definition of “family member” to include siblings, grandparents, grandchildren, parents-in-law, any blood relative, and “any individual that the employee shows to have a close association with the employee which is the equivalent of a family relationship.” This means that employees can now potentially take job-protected FLA leave to care for aunts and uncles, as well as close friends who may be known within the family as “aunt” or “uncle.”
Finally, the new law expands intermittent FLA, so that the 12 weeks of leave can now be spread out over a full 12-month period (as opposed to 24 weeks under existing law).
The Impact of the New Law on the FLI Program
The new law also expands paid leave in several ways:
First, effective on July 1, 2020, the new law doubles the length of paid FLI to 12 weeks, and increases the amount of intermittent FLI from 42 days to 56 days.
Second, effective on July 1, 2020, the FLI weekly benefit rate will increase to 85% of the employee’s average weekly wage, with a higher benefit cap ($859 per week).
Third, FLI leave can now be taken for any of the reasons that unpaid leave can be taken under the New Jersey SAFE Act, including domestic or sexual violence, suffered by either the employee or a family member.
Finally, the new law adds a provision prohibiting employers from discharging, harassing, or otherwise discriminating or retaliating against an employee on the basis that the employee requested or took any temporary disability benefits or FLI benefits, including “retaliation by refusing to restore the employee following a period of leave.” Since employees of small businesses with less than 30 employees are able to file for FLI, this provision could be interpreted by courts as granting those employees some measure of job protection, even in the absence of FLA coverage.
Takeaways for Employers
Small employers with less than 50, but more than 30 employees, are now subject to the FLA for the first time, and will need to change their policies and handbooks to add a legally-compliant FLA leave policy. All employers subject to the FLA should incorporate the broader definition of “family member” into their policies, and ensure that their policies allow for intermittent FLA usage which is consistent with the new law. Handbooks and policies should make clear that FLA leave is job-protected, and that retaliation is prohibited. Supervisors and managers should also be made aware of these requirements.
While the FLI program remains 100% funded by employee deductions, employers should be aware of the new, more generous benefits arriving in 2020. As a practical matter, expanded FLI may make it more likely that employees will take longer leaves of absence to care for new children or ill family members. Furthermore, given the new anti-retaliation provisions added to the FLI, even small employers not subject to the FLA need to proceed with caution when considering disciplinary action or termination of employees who have sought or received FLI benefits.
The full text of the new law is available here, and is summarized in a press release here.
Ivo is a partner in Obermayer’s Labor Relations & Employment Law Department. He focuses his practice on representing employers, including advising companies on how to handle employee issues, and defending employee claims...
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