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New Jersey Family Leave: What You Need to Know

Feb 22, 2019

On February 19, 2019, Governor Murphy signed legislation updating and expanding the paid family leave program.  New Jersey workers will see this tax paid through payroll as “FLI” (in case you were wondering what those letter meant), which averaged around $33 for the year. In order to fund the updated program, payroll taxes on FLI potentially may increase to $100 for some workers. The state is also allocating additional funds to better educate workers of the program’s existence. The goal of this new legislation is to allow New Jersey workers additional time off when taking care of a sick relative (as defined below) or newborn(s). Also, this will allow New Jersey workers to collect a larger sum of money while on leave. When the law was first enacted back in 2009, New Jersey was the second state to offer any form of a family leave program.

Effective immediately, the definition of who is covered under the act has expanded. This includes, but is not limited to, siblings, grandparents, grandchildren, in-laws or anyone else related by blood or “equivalent” family.

Effective June 30, 2019, this act will protect additional jobs for those who take family leave. The old threshold was: Any employee of a company with 50 or more employees was guaranteed to have a job waiting for them when they returned from family leave. The new threshold will be lowered to companies with 30 employees or more.

Effective July, 2020, workers will be entitled to more time off and additional funds. The old law allowed for a limit of six weeks and weekly benefits around $650.  The new law allows up to 12 weeks of family leave and, if a worker doesn’t want to take all 12 weeks concurrently, they will be eligible for 56 days of paid leave in a 12-month period as opposed to 42 days. Maximum payouts will increase to about $860. Up to that limit, workers will be entitled to receive 85% of their weekly wage, which was only 2/3 under the old law.

Any businesses operating in New Jersey that meet the above criteria: These new laws will impact you. Talk to your trusted advisors as soon as possible to discuss any ramifications of this (or any other) new law.

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Timothy Schuster

Mr. Schuster is a Senior Manager providing tax compliance services to individual filers, as well as assistance on tax returns for companies in the manufacturing and real estate industries.

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