Bill Expanding Employee Family Leave Insurance and Job Protection Moves Through Legislature

Ten months after it was vetoed by the prior governor, legislation to expand New Jersey’s paid family-leave benefits is now moving through the legislature and toward the desk of the new governor, Phil Murphy, who is expected to embrace it.

Co-sponsored by Sen. President Steve Sweeney (D-Gloucester), the current bill - S-2528 - is similar to the bill that passed both houses of the Legislature last year. It would give eligible workers more paid leave to care for a newborn or another family member and more money for each day of leave they take. The Senate Labor Committee voted 3-1 to advance the bill.

New Jersey is one of three states to offer family leave insurance, which is funded through small employee payroll deductions. Currently, eligible workers can receive six weeks, or 42 days, off at up to two-thirds of their pay to a maximum of $637 a week. A person working at a company with at least 50 employees can take a leave and have a guarantee of job security up to 12-weeks under a different law, the New Jersey Leave Act.

S- 2528 would provide a significant increase in paid leave. It would double to 12 weeks, or 84 days, the amount of time a person could be paid for leave, increase the maximum weekly payment to 90 percent of pay or a maximum $1,195 per week.

The law does not provide job security but makes it unlawful for employers to retaliate or discriminate against employees who receive the benefit, although this job protection is given to workers at companies with 30 more employees.

This year, every New Jersey worker will contribute 0.1 percent of their wages, or 50 cents a week up to $33.50. Employers do not contribute to the benefit.

According to an online survey taken by the Employers Association of New Jersey of its members, more than three of four employer respondents – 77 percent – stated that employees have utilized family leave insurance benefits.

This response is in sharp contrast to a recent report issued by the think tank New Jersey Policy Perspective which concluded only 12 percent of New Jersey's eligible new parents have taken advantage of family leave benefits.

Expanding the amount of insurance payments and doubling the duration of the entitlement is designed to help, at least in part, lower paid workers at small businesses as many workers can’t lose income to bond with a child or care for a family member.

And many workers are unaware of the benefit. A 2016 study by the Columbia University's Mailman School of Public Health found that few workers knew the benefits exist or how to sign-up, even though employers are required to notify employees.

We can assume that the high use of family leave insurance at EANJ members is because HR administrators are doing their jobs and notifying employees, and that many small businesses without HR knowledge are clueless.

But even as the bill requires a promotion campaign, as noted, it does not provide job security for employees that work for employers with fewer than 30 employees, meaning that a worker can be legally fired while out on leave.

According to the N.J. Department of Labor and Workforce Development, 96 percent of N.J. firms employ fewer than 50 workers, with the vast majority employing ten or fewer. Indeed, several proponents of the bill have complained that the lack of job protection would leave about 750,000 workers without job security.

And in actuality, the “job protection” for an employee who works for a firm with 30-49 employees, a sliver of the state’s economy, is based on employers engaging in self-restraint, not guaranteed reinstatement under the bon fide s leave law. In short, job security for most workers is illusory.

But it may likely work itself out because small businesses hardly ever grasp the details of complex labor laws, assuming they have an awareness that the law applies to them.  Instead, employers will exercise caution when firing employees merely because they have taken advantage of benefits to which they are otherwise entitled.  And that impulse will have a chilling effect. That’s exactly what happened with temporary disability benefits. There is no job security under the TDB law either, but employers are loath to fire disabled workers. Similarly, who wants the hassle of firing a mom bonding with their infant or a worker caring for an ill parent?