New Jersey started its paid family leave plan in 2009 with the New Jersey Family Leave Act. New Jersey paid family leave (PFL) made NJ the second state (after California) to pass a PFL policy. If you’re a New Jersey employer, you need to know about your responsibilities.
Q&A for New Jersey paid family leave
New Jersey paid family leave is a state-mandated program that provides New Jersey workers with up to 12 weeks of paid leave for qualifying life events. Read on for a Q&A on NJ PFL.
What are an employer’s responsibilities?
Employers don’t have to contribute to New Jersey paid family leave. But, you do have several responsibilities to take care of.
- Display Temporary Disability and Family Leave Insurance posters
- Provide written notice of PFL when an employee is hired, requests information, or lets you know they need paid leave
- Report employee’s quarterly earnings to the state of New Jersey
- Monitor the benefits issued to employees
- Verify that the time frame provided on an employee’s Notice of Eligibility Determinations (form D20) is correct
- Deduct employee contributions from employee wages and remit to the state
What are the employee contribution rates for 2023?
New Jersey paid family leave is funded through employee contributions.
New Jersey PFL contributions rates for 2023 are 0.06% of the first $156,800 in covered wages.
While employers don’t have to contribute to NJ PFL, you must deduct payroll taxes from New Jersey workers.
Who qualifies for NJ PFL?
Any New Jersey employee that contributes to PFL can qualify for NJ PFL. To qualify, employees must have paid into the program through payroll deductions and meet minimum gross earnings requirements. Employees are also eligible when covered by an approved private plan.
Some employees are exempt from New Jersey PFL, including:
- Federal government employees
- Faith-based organization employees
- Independent contractors
- Out-of-state employees
What types of leave does New Jersey PFL cover?
New Jersey PFL covers several qualifying life events.
Qualifying life events include:
- Bonding with a newborn*, or a new child through adoption or foster care
- Providing care for a family member with a serious physical or mental health condition
- Handling matters related to domestic or sexual violence
How much money do employees receive while on leave?
Paid family leave benefits are based on an employee’s average weekly wage. Employees receive 85% of their average weekly wages, up to the year’s maximum weekly benefit rate.
For 2023, the maximum weekly benefit rate is $1,025 per week.
What is the minimum gross earnings requirement?
Employees must pass a minimum gross earnings requirement to receive their benefits. When reviewing employee claims, the New Jersey Department of Labor and Workforce Development considers the gross earnings reported for the five completed quarters before the leave began. The first four quarters of that time period act as the base year.
For 2023, an employee must have worked for a total of 20 weeks while earning:
- At least $260 weekly
- A combined total of $13,000 in the four quarters of the base year
For example, if an employee has a claim that’s dated January 2023, their claim is based on their reported earnings from October 1, 2021 to September 30, 2022. And if the claim is dated December 2023, the claim is based on reported income from July 1, 2022 to June 30, 2023.
Do employees have to use their paid family leave all at once?
No. Employees can use their benefits all at once or intermittently over the course of a 12-month period.
Employees can collect paid family leave benefits for:
- 12 consecutive weeks in a 12-month period
- 56 individual days in a 12-month period if the leave is intermittent
Employees can also add their accrued PTO to their paid family leave to extend the amount of their leave.
What are an employee’s responsibilities?
To receive New Jersey paid leave benefits, employees must:
- Provide the New Department of Labor and Workforce Development with an application for NJ PFL.
- Give the employer advanced notice of their need for PFL:
- 30 day’s notice if the leave is continuous
- 15 days in advance if the leave is intermittent
Does New Jersey tax insurance benefits?
No. While New Jersey doesn’t tax insurance benefits, the federal government does.
Once employees take paid leave, they must also complete Form 1099-G in January of the following year.
Does NJ PFL offer job protection for employees on leave?
No. New Jersey PFL doesn’t offer job protection while an employee is on paid leave.
Employees may be protected under the FMLA.
What happens if I realize there is incorrect information on an employee’s claim?
Notify the Division of Temporary Disability and Family Leave Insurance immediately if you notice that issued benefits fall on days your employee worked or received vacation or sick pay.
Call customer service at (609) 292-7060 or fax a corrected statement with the employee’s Social Security number to (609) 984-4138.
Can I require employees to use accrued paid time off before taking NJ PFL benefits?
No. While your employees may choose to use their accrued paid time off before receiving benefits from NJ PFL, you can’t require it.
If an employee uses their accrued PTO (sick leave or vacation time), it will not reduce the days covered by PFL. Instead, an employee can use their accrued PTO along with the maximum PFL benefits they’re allowed to use.
Can I offer a private insurance plan instead of the state plan?
Yes. You can have a private insurance plan instead of the state plan. The private insurance plan must be approved by Private Plan Operations with the Division of Temporary Disability Insurance.
Private plans must meet the basic provisions of NJ PFL to qualify. To use a private plan instead of the state plan, the private plan must:
- Offer paid benefits that are equal to or greater than the amount paid on a state plan claim
- Have eligibility requirements that aren’t more restrictive than those of a state plan
- Offer coverage that is equal to or greater than the state plan
Employers or employees covered by a private plan don’t need to contribute to the State’s Temporary Disability Insurance Trust Fund while covered by the private plan. And, if employees form a collective bargaining agreement, they must hold a written election. For the plan to be implemented, a majority of employees must agree to the plan prior to the effective date.
How can I establish a private plan?
There are three ways to establish a private plan. You can:
- Work through an insurance company approved by the New Jersey Department of Banking and Insurance and Private Plan Operations before writing a private plan policy.
- Establish a self-insured plan you administer. You must also pay employee benefits.
- Choose a union welfare fund. The union fund must administer the plan and pay benefits.
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