Governor Phil Murphy recently signed landmark legislation that significantly expands the family leave benefits available to employees working in New Jersey. The legislation, A3975, places New Jersey at the forefront of a new trend with states requiring employers to offer family leave benefits that exceed the requirements of the federal Family Medical Leave Act (FMLA). As Governor Phil Murphy touted, the legislation “provid[es] the most expansive paid family leave time and benefits in the nation....”

A3975 amends and significantly expands New Jersey’s existing Family Leave Act (NJFLA) and the New Jersey Family Leave Insurance law (NJFLI). Some of the more notable changes include the following:

Increased Benefits

A3975 increases the weekly benefit paid to employees on leave from two-thirds of an employee’s pay to 85 percent of an employee’s pay (otherwise capped at 70 percent of the statewide average weekly pay, currently $860). A3975 also requires employers to provide up to twelve weeks of paid family leave or temporary disability insurance in any twelve-month period, which is double the amount previously required under the NJFLI. Finally, A3975 increases intermittent leave offered to employees under the NJFLI from 42 days to 56 days.

Expanded Access to Paid Family Leave

In addition to increasing leave time and wage replacement pay, A3975 also outlines additional circumstances in which employers must offer paid family leave. For example, the amendment now permits employees to take leave when the employee or a family member is a victim of domestic or sexual violence; it offers family leave when an employee has elected to become a foster-care parent; and it permits employees to take family leave when introducing a new child into the family through a gestational carrier agreement.

A3975 also expands the definition of “family member” under the NJFLA, and thereby enables employees to take family leave to care for the illness of family members other than a child, parent or spouse. The expanded definition includes “parent-in-law, sibling, grandparent, grandchild,” “any other individual related by blood to the employee,” and “any other individual that the employee shows to have a close association with the employee which is the equivalent of a family relationship.”

More Employers Required to Offer Paid Family Leave

A3975 pulls more employers within the reach of the NJFLA. Previously, the NJFLA, like the federal FMLA, exempted employers who had fewer than fifty employees. The amendment reduces the employer size threshold to just 30 employees. Accordingly, employers who employ 30 or more employees, in or out of New Jersey, must offer employees working within the state twelve weeks of job-protected leave. They must also comply with the NJFLA’s anti-retaliation provisions.

Higher Tax Withholdings

A3975 does not require employers to contribute toward or otherwise cover the costs of the increased benefits outlined above. Rather, pursuant to A3975, the additional family leave benefits will be paid for by increases to current employee payroll deductions in the state.

Increased Penalties

A3975 imposes higher penalties on employers who violate the NJFLI. For employers who knowingly make misrepresentations or refuse to disclose information in an effort to reduce an employee’s benefits, A3975 increases the penalty from $50 to $250 for every misrepresentation or nondisclosure. For other willful violations, A3975 imposes a $500 fine (previously $50), and for violations where the employer acts with intent to defraud the Division of Temporary Disability Insurance, A3975 increases the fine from $250 to $1,000.

Timing for Compliance

The changes imposed by A3975 do not all take effect at the same time. Some provisions, like the expanded definition of “family member” under the NJFLA, became effective February 19, 2019. Other provisions, like reducing the number of threshold employees from 50 to 30, and increasing the number of weeks of paid family leave from six to twelve, take effect at later dates (June 30, 2019 and July 1, 2020, respectively).  

Employers operating in New Jersey should review their current policies and procedures to ensure compliance with these expanded protections and benefits provided under New Jersey law, especially those smaller employers who will now be obligated comply with the NJFLA.