Declaring it the “most expansive paid family leave time and benefits in the nation,” New Jersey Governor Phil Murphy signed Assembly Bill (AB) 3975 into law on February 19, 2019.  AB 3975 significantly expands the scope of the New Jersey Family Leave Act (NJFLA) and the New Jersey Temporary Disability Benefits Law (NJTDBL), by, among other things, imposing new obligations on smaller employers that were not previously covered by the NJFLA.  The new law also amends New Jersey’s Security and Financial Empowerment (SAFE) Act by granting paid family temporary disability leave benefits to covered time off relating to domestic and sexual violence.  AB 3975 went into effect immediately, but some of its provisions will be phased in over time.  

New Jersey Family Leave Act

Prior to its amendment, the New Jersey Family Leave Act (NJFLA) allowed qualifying employees of covered employers to take up to 12 weeks of unpaid family leave in a 24-month period for the birth or adoption of a child or to care for a family member with a serious health condition.  Since July 2009, while on NJFLA leave, employees could receive up to 6 weeks of paid benefits in a 12-month period, up to a maximum amount of $650 per week, through the Family Leave Insurance provisions of the New Jersey Temporary Disability Benefits Law (NJTDBL).  Such benefits are paid through the state or via a state-approved private plan, if established by the employer.  They are funded through payroll deductions.

Perhaps the most significant amendment to the NJFLA is the expansion of the number of employers it covers.  Previously, the NJFLA applied only to employers of 50 or more employees.  Effective June 30, 2019, the NJFLA will apply to all employers that employ at least 30 employees during each “working day” in the “20 or more calendar workweeks in the then current or immediately preceding calendar year.”  This change substantially increases the number of covered employers. 

AB 3975 also makes several other significant changes to the NJFLA that are effective immediately, including: 

• Revising the definitions of “family leave,” “child,” and “parent” to provide for leave in situations involving the placement a foster child or the birth of a child via a surrogate or gestational carrier;

• Broadening the definition of “family member” (which previously included only child, parent, spouse, or civil union partner) to also include parent-in-law, sibling, grandparent, grandchild, domestic partner, or any other blood relative, and “any other individual that the employee shows to have a close association with the employee which is the equivalent of a family relationship”; and

• Expanding the period during which intermittent leave may be taken from 24 consecutive weeks to 12 consecutive months.  Additionally, while employers previously had to agree to grant intermittent leave for the birth or adoption of a child, now it must be provided.  Intermittent leave may also be taken for the placement of a foster child or the birth of a child via a gestational carrier. 

New Jersey Security and Financial Empowerment Act

The New Jersey SAFE Act provides qualifying employees with up to 20 days of unpaid leave in a 12-month period to address circumstances resulting from domestic violence or a sexually violent offense affecting the employee or the employee’s family members. The SAFE Act has now been amended to incorporate the much broader definition of family members in the NJFLA.

Additionally, employers may no longer require employees to use accrued paid vacation, personal or sick leave benefits for such leave, but employees may choose to do so.  The law has also been amended to allow employees to elect to use benefits available under the NJTDBL. 

New Jersey Temporary Disability Benefits Law

In addition to the increased leave entitlements discussed above, AB 3975 also increases the monetary benefits available to employees through the Family Leave Insurance provisions of the NJTDBL.

Most significantly, AB 3975 doubles from 6 to 12 the number of weeks for which benefits are available in any 12-month period for the covered leaves discussed above that commence on or after July 1, 2020.  Additionally, the number of days of benefits for intermittent leave available for those covered leaves will increase from 42 to 56 days. 

At the same time, beginning July 1, 2020, the weekly benefit rate will increase from approximately 66% to 85% of the employee’s average weekly wage, subject to a maximum of $860 per week.  The increase in the amount of benefits applies to both temporary disability leave and the family temporary disability leaves discussed above.  These increased benefit amounts will continue to be funded by payroll tax contributions. 

For family temporary disability leaves commencing on or after July 1, 2019, benefits will be immediately payable.  The current one-week waiting period will be eliminated. 

Also, effective immediately, employers are no longer able to require (but they may still permit) employees to use paid sick leave, vacation time, or other leave at full pay before using disability benefits.  Employers are also no longer entitled to reduce the number of days of disability benefits available to employees by the number of days of leave at full pay provided by the employer. 

Additional amendments to the NJTDBL include:

• Expanding the definitions of “family member,” “child,” and “parent” so that they are the same as under the NJFLA;

• Permitting paid leave benefits for leave covered by the NJ SAFE Act;

• Imposing additional notice requirements for employers with private plans;

• Requiring, with respect to a private plan under a collective bargaining agreement, that a majority of the employees covered by the agreement agree to contribute to the plan through a written election, unless the collective bargaining agreement expressly waives their right to a majority election as a condition for the private plan, and permitting such elections to be conducted via e-mail with electronic signatures; and

• Imposing a $250 penalty on employers that fail to provide certain required notifications or disclosures and extending penalties previously available under the law (fines up to $1,000 and imprisonment of up to 90 days) to such failures under certain circumstances.    

Finally, the NJTDBL now includes an expansive anti-retaliation provision that prohibits an employer from discharging or otherwise discriminating or retaliating against employees because they requested or took temporary disability benefits or family temporary disability leave benefits, including “retaliation by refusing to restore the employee following a period of leave.”  The amendments also create a private right of action for violation of this provision, with all remedies available in tort (such as emotional distress and punitive damages) as well as civil fines, injunctive relief, reinstatement, reinstatement of full fringe benefits and seniority rights, compensation for lost wages, benefits and other remuneration, and reasonable costs and attorneys’ fees.

It should be noted that AB 3975 also states that the amendments should not be construed to grant an employee any reinstatement rights under the NJTDBL, or to modify any reinstatement rights under the NJFLA.  It appears that this disclaimer means that smaller employers that still do not meet the lowered 30-employee threshold for coverage under the NJFLA may not be obligated to reinstate employees merely because they used NJTDBL benefits during their leave. 

Suggested for Employers—Action Items Based on these New Entitlements

In light of these new amendments, employers with operations in New Jersey should consider taking the following steps:

• Updating their handbooks and applicable policies to reflect the changes of the law;

• Revising any internal leave forms to reflect the expanded definitions in the three laws; and

• Complying with new notice requirements for employers with private plans upon publication of the new notice form.