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New Jersey Adopts Paid Family Leave Law

    Client Alerts
  • April 18, 2008

Last week, the New Jersey Senate approved a new law granting paid leave benefits to certain employees within the state.  Governor Corzine has indicated his intent to sign the bill into law, making New Jersey the third state in the U.S. to adopt paid family leave.  The New Jersey bill goes beyond laws in California and Washington in terms of the funding source and employee rights.

Under the New Jersey law, beginning July 1, 2009, employees can take up to six paid weeks leave in order to care for a sick spouse, parent or child, or to care for a newborn or newly adopted child.  Employees will be entitled to collect up to two-thirds of their salary while on leave, up to a maximum of $524 per week.

Like the California leave law, employers do not directly pay leave benefits.  Workers will contribute $33 per year through a new mandatory payroll tax.  Unlike California, the law does not provide paid benefits for the employee’s own incapacity, only that of a family member.  Leave can be taken in one segment, or intermittently, up to 42 days per year.

Businesses with fewer than 50 employees would have to provide the paid leave, but would not have to guarantee that the employee will be reinstated upon return from leave.  Employers can require employees to exhaust sick leave and vacation time before beginning paid family leave.  For eligible employees, federal FMLA rights would apply in addition to the paid leave benefit.

The New Jersey law is an example of a developing trend in the U.S.  At both the state and federal levels, legislatures are considering a number of measures intended to provide some form of paid leave to employees.  Often, the lack of pay during leave is cited as the main reason why employees do not elect to take FMLA leave, even when they are eligible.  Employers can expect that by providing paid leave, more employees will choose to take the time away from work.