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Governor Signs Bill Enacting Paid Leave Law


June 16, 2010

By Bruce W. Padula | New Jersey now follows California and Washington to become the third state to require employers to offer paid leave to employees wishing to care for a new child or sick relative. The new law will allow up to six weeks of paid leave during any twelve month period in the form of state temporary disability insurance benefits.

Eligibility

Employees eligible for the paid leave are those who are covered under the state unemployment compensation law (full-time employees employed at least twenty weeks and employees who have been out of such covered employment less than two weeks). The law allows an eligible employee to take paid leave any time in the first year after a child’s birth or adoption or to take paid leave to care for a sick relative (child, spouse, domestic partner, civil union partner or parent) who is receiving inpatient care in a medical facility or under continuing supervision from a health care provider. In addition, the law covers all employers subject to the New Jersey unemployment compensation law, regardless of the number of employees they employ.

Benefits Under the Law

The benefit will be funded by worker contributions of an estimated $33 per year through a mandatory employee payroll tax, not by the employer directly. Employees who opt to take the paid leave would receive two-thirds of their salary, to a maximum of $524 per week. Further, under the new law, employers can require the employee to take up to two weeks of available sick or vacation pay before receiving benefits.

Potential Burden to Employers

Although the employer is not directly responsible for paying an employee on leave, there still may be underlying burdens placed on employers. For example, the law provides for numerous notice obligations, such as providing all employees with a notice of benefit rights. The employer is required to adequately assess the circumstances that might fall under this new law to determine if the employee is eligible for the paid leave, which may increase administrative costs. The State has estimated that 38,000 employees annually would take the paid leave and this alone can create hardships for employers who may need to hire additional employees or pay overtime pay to employees covering the duties of the employees on leave.

FMLA and NJFLA

The Legislature, in drafting this bill, did take into account the federal and state laws already in place to provide leave possibilities to employees. As such, this law requires employees to take paid leave concurrently with any leave under the Federal Family and Medical Leave Act (“FMLA”) and the New Jersey Family Leave Act (“NJFLA”). Unlike the FMLA and the NJFLA, however, the paid leave law does not require the employer to return the employee to the same or equivalent position at the end of the leave. If it is found that the paid leave also qualifies under FMLA or NJFLA and the employee has a guarantee that they will retain their position or its equivalent under the already established leave provisions, then the new law would not affect any rights the employee is entitled to under the FMLA and NJFLA.

Effective Date

The law will take effect on January 1, 2009 and payments will become available starting on July 1, 2009. There are many intricacies and exemptions to the new law that will affect each entity differently based on entity type. Entities should consider reviewing the new law with their attorneys to determine how they will be affected.

This Scarinci Hollenbeck Legal Alert has been prepared for the general information of clients and friends of the firm. It is not meant to provide legal advice with respect to any specific matter and should not be acted upon without professional counsel. Individuals with questions are urged to contact the Scarinci Hollenbeck attorney with whom they work.

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Author: Scarinci Hollenbeck


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