New Jersey

Young woman holding hands with older woman

 

Although there are common elements to the many PFL regulations, there are also differences in the way each state designs its plan and coordinates it with other leave types. Here’s what you need to know about PFL and state disability in New Jersey.

 

Paid Family Leave

On February 19, 2019, Governor Murphy signed legislation to expansively amend New Jersey's Family Leave Insurance, Temporary Disability Insurance and Family Leave Act programs. The below FAQs reflect these changes as well as 2020 annual updates.


What is New Jersey Family Leave Insurance (FLI)?

The (FLI) program is a paid family leave program that provides up to six weeks of wage reimbursement to:

  • Bond with a new child within 12 months of birth or placement via adoption or foster care
  • Care for a seriously ill family member
  • Assist a family member who is a victim of domestic or sexual violence

Family member refers to a child, spouse, domestic partner, civil union partner, parent, siblings, grandparents, grandchildren, parents-in-law, and others related by blood or relationship equivalent to a family relationship.

When did NJ FLI begin?

Since July of 2009, FLI has been available to NJ employees.
  

Who is eligible?

Any employee working in New Jersey that meets one of the two following requirements:

  • Worked at least 20 weeks during the 52 weeks leading up to the claim, making at least $172 per week, or
  • Earned at least $8,600 during the 52 weeks leading up to the claim

Employees are required to provide notice unless the employee needs the time unexpectedly or the leave changes due to unpredictable reasons. To bond with a new child, an employee is required to give 30 days' notice and provide reasonable advance notice for care of a seriously ill family member.

What is the voluntary/private plan option?

Employers are automatically enrolled with the State, unless they received prior approval for a private plan through an approved insurance carrier or decide to self-fund their plan. A private plan cannot be more restrictive, offer lower benefits or require more employee contributions than prescribed by the State.

Lincoln is an approved carrier in New Jersey to provide Temporary Disability Benefit (TDB) coverage; Lincoln does not offer a self-funded option and does not administer the FLI program.
  

How is the program funded?

This benefit program is 100% employee-funded by payroll deduction. The state updates deduction rates on an annual basis.

  2019 2020
Employee contribution rate 0.08% 0.16%
Employee taxable wage base $34,400 $134,900
Maximum contribution $58.48 $215.84

PFL dedication are taken in a similar manner to Social Security and Medicare deductions.

  • 2020 Maximum annual deduction will be $350.74 for each employee that earns an annual wage equal to or greater than the 2020 employee taxable wage base.
  • Annual deduction for employees earning less than the 2020 employee taxable wage base will be equivalent to 0.26% of their wages for the year.

2020 will be the first year the state will enforce a different taxable wage base for employees and employers. This change was introduced to shift more cost to employees given the significant benefit increase effective July 1, 2020.  While the employer taxable wage base will remain 28 times the NJ statewide average weekly wage (SAWW), raised to the next higher multiple of $100, the employee taxable wage base will increase to 107 times the SAWW, rounded to the next higher $100.

Are FLI benefits taxable?

FLI benefits are subject to federal income tax and to federal rules on reporting income and paying taxes. FLI benefits are not subject to New Jersey state income tax. Employees may choose to have 10% of their benefits withheld for federal income tax. Benefits are reported on a 1099-G tax form.
  

What are the benefits to the employee?

The 2020 weekly benefits will continue to be 66.67% of an employee’s average weekly wage up to the maximum of $667 for claims incurred January 1st through June 30th. For claims incurred July 1st or later, benefits will increase to 85% with a maximum benefit of $881. For more of the benefit changes see below:

  2019 2020 (Jan 1 to June 30) 2020 (July 1 and later)
       
Waiting period 7-day wait period (removed 2/4/19) 0-day 0-day
Benefit% 66.67% 66.67% 85%
Max weekly benefit $650 $667 $881
Intermittent leave allowance Up to 42 days Up to 42 days Up to 56 days
Benefit duration 6 weeks 6 weeks 12 weeks

Benefits are not payable for any period during which an employee receives any paid sick leave, vacation time or other leave at full pay from the employer.

  

Does New Jersey FLI provide intermittent leave?

Yes. Leave can be taken intermittently during a 12-month period and should be agreed upon between the employer and employee.

In the case of taking intermittent leave for bonding with a child, the employee must take the leave in seven or more day increments.

Effective July 1, 2020, the maximum intermittent FLI leave is increased from 42 days to 56 days.

  2019 2020 (Jan 1 to June 30) 2020 (July 1 and later)
Intermittent leave allowance Up to 42 days Up to 42 days Up to 56 days


Intermittent leave requires 15 days' notice before the leave.
 
 

Does New Jersey FLI provide job protection?

No, the FLI program does not provide job protection. The employee's job may be protected if their leave also qualifies for leave under FMLA or the New Jersey Family Leave Act.
  

How can I get more information and access forms from New Jersey state?
Other New Jersey state paid leave resources:

 

Temporary Disability Benefits

 
What is Temporary Disability Insurance (TDI)?

Temporary Disability Insurance provides cash benefits to employees working in New Jersey who experience a non-work related illness, injury, or other disability that prevents them from working. Most employers with employees working in New Jersey are required to have TDI for their employees. Note: this program is also commonly referred to as Temporary Disability Benefits (TDB).

When did NJ TDI begin?

New Jersey employers and employees have been funding a wage replacement insurance program since 1948.
  

Who is eligible?

Employees who work 20 calendar weeks in the state and have earned a minimum of $172 or have earned $8,600 in the base year (base year = 52 weeks prior to date of disability) are eligible.

Is there a voluntary plan option?

Employers can choose to provide coverage through a private plan, which must first be approved by the Division of Temporary Disability Insurance. Carriers commonly handle the application process with the Division of TDI on an employer’s behalf.

Private plans must have, at minimum, the same or better benefit amounts, eligibility requirements and duration of payments as the state plan. A private plan cannot cost the employee more than the state plan does. Private plan disability benefits may be subject to Social Security (FICA) and federal income taxes.

How is the program funded?

Both employers with employees working in the state and the employees themselves contribute to the cost of the temporary disability program. For employees’ contributions, deductions are taken out of their paychecks.

  2019 2020
Employee contribution rate 0.17% 0.26%
Employer taxable wage base* $34,000 $35,300
Employee taxable wage base** $34,000 $134,900
Maximum employee deduction $58.48 $350.74

*There is currently a single taxable wage base used to determine employee and employer contributions under the state plan.
**Starting in 2020 there will be a significantly higher taxable wage base for employees to account for 2020 benefit increases. Employees will now bear a much larger share of costs (whether under the state or a private plan.

Note: The state of New Jersey passed legislation (A-3975) on February 19, 2019, to amend a number of mandated programs, including TDI. The taxable wage base will be increasing significantly as of January 1, 2020. Further detail will be forthcoming as the state issues regulations. 

What are the benefits to the employee?

The maximum benefit duration is the lesser of up to 26 weeks, or until benefits equal to one-third of an employee’s total wages earned during the base year. The base year is the 52 weeks immediately before the week in which the disability began.

  2019 2020( Jan 1 to Jun 30) 2020( July 1 to later)
Waiting period 7-day wait period (removed 2/4/19) 0-day 0-day
Benefit % 66.67% 66.67% 85%
Max weekly Benefit $650 $667 $881
Intermittent leave allowance Up to 42 days Up to 42 days Up to 56 days
Benefit duration 6 weeks 6 weeks 12 weeks

Note: Starting July 1, 2020, the maximum weekly benefit amount will be increasing approximately 30% as stipulated under amendment A-3975. Further detail will be forthcoming as the state issues regulations. 

Are TDB benefits taxable?

The same proportion of premium funded by the employer is used to determine the portion of the disability benefits that are subject to federal income taxes and the Federal Insurance Contributions Act (FICA). FICA taxes will be for six calendar months following the last calendar month in which the employee worked.

When an employee’s premium payments for disability benefits are paid with after-tax dollars, their contributions are not subject to federal income or FICA taxes. However, if the employee pays all or a portion of the premium on a pre-tax basis, then the entire benefit is subject to federal income tax and FICA.

Does NJ TDB provide job protection?

Although NJ TDI doesn’t require an employer to hold a job for someone receiving benefits, the employee may have job protection rights under the federal Family and Medical Leave Act (FMLA).
  

Other NJ TDB resources:
Insurance products are issued by The Lincoln National Life Insurance Company, Fort Wayne, IN, Lincoln Life & Annuity Company of New York, Syracuse, NY, and Lincoln Life Assurance Company of Boston, Dover, NH. The Lincoln National Life Insurance Company does not solicit business in New York, nor is it licensed to do so. Product availability and/or features may vary by state. Limitations and exclusions apply.