New Jersey Employment Law Update – February 2019

New Jersey

Paid Family Leave

On February 19, 2019, New Jersey Governor Phil Murphy signed legislation (A.B. 3975) that expands the state’s Temporary Disability Insurance (TDI) and Family Leave Insurance (FLI) benefits, establishes new administrative requirements for the TDI and FLI programs, and increases TDI and FLI payroll taxes as follows:

  • For leave periods beginning on or after July 1, 2020, increases the amount of weekly FLI and TDI benefits from two-thirds of a claimant’s average weekly wage to 85 percent of that wage, subject to a maximum amount. The maximum, in turn, is to rise from 53 percent to 70 percent of the statewide average weekly wage (SAWW) for all workers.
  • Increases the maximum FLI benefit period from six to 12 weeks during any one-year period and the maximum intermittent FLI leave from 42 to 56 days. Moreover, the bill expands the family members for whose care individuals may receive FLI benefits during periods of leave from employment to include siblings, grandparents, grandchildren, parents-in-law, and others related by blood or relationship equivalent to a family relationship. FLI benefits are also extended to individuals who take time off from work to assist a family member who is a victim of domestic or sexual violence.
  • Facilitates access to FLI and TDI benefits by the following:
    • Elimination of the one-week waiting period before the payment of FLI benefits;
    • Effective June 30, 2019, lowering from 50 to 30 employees the threshold at and above which employers must grant unpaid family leave to employees for up to 12 weeks in a 24-month period without terminating employment because of the leave;
    • No longer allowing employers to require that employees use all their paid leave, up to two weeks, before the payment of FLI benefits; and
    • Limiting to two weeks the amount of sick leave state and certain local government employees must use before receiving TDI benefits, whereas current law requires them to exhaust their entire sick leave first.
  • Establishes new penalties for violations of the TDI and FLI laws. Specifically, employers who fail to provide certain notifications and disclosures as required will be fined up to $1,000, and in certain cases, imprisoned for up to 90 days. In addition, the bill prohibits employer retaliation against an employee for taking or requesting TDI or FLI benefits, except that employers with fewer than 30 employees are not required to reinstate an employee after a period of FLI leave. The civil fine for the first act of prohibited retaliation ranges from $1,000 to $2,000 with each subsequent violation resulting in a fine not to exceed $5,000.

The new law also:

  • Requires the New Jersey Department of Labor and Workforce Development (DOLWD) to implement goals for the timely determination of TDI and FLI benefit eligibility and amounts, and issue an annual report regarding efforts to attain those goals. The report must contain specific recommendations regarding any increased funding needed to achieve the goals and modernize the administration of the TDI and FLI programs. The department is to include the recommended funding increases in setting the annual rate of TDI and FLI taxes.
  • Increases the amount of payroll taxes that are to be raised to pay for the benefit expansion and additional program administration expenditures, and expands the wage base on which the taxes are imposed from 28 times to 107 times the SAWW. The benefit increases and higher administrative costs are to be charged exclusively to workers. The DOLWD sets the annual TDI and FLI assessment rates according to existing statutory formulae that consider estimated annual benefit payments, estimated administrative costs, and any unexpended account balances.

The law became effective February 19, 2019.

Read NJ A.B. 3975

Minimum Wage Increases

On February 4, 2019, New Jersey Governor Phil Murphy signed legislation (A.B. 15) that incrementally raises the state’s hourly minimum wage. Per the Governor’s press release, the current minimum wage in New Jersey is $8.85 per hour. Under the new law, the base minimum wage for New Jersey workers will increase to $10 per hour on July 1, 2019. By January 1, 2020, the statewide minimum wage will increase to $11 per hour, and then will increase by $1 per hour every January 1st until it reaches $15 per hour on January 1, 2024.

For seasonal workers and employees at small businesses with five or fewer workers, the base minimum wage will reach $15 per hour by January 1, 2026. By January 1, 2028, workers in these groups will receive the minimum wage inclusive of inflation adjustments that take place from 2024 to 2028, equalizing the minimum wage with the main cohort of New Jersey workers.

For agricultural workers, the base minimum wage will increase to $12.50 per hour by January 1, 2024. No later than March 31, 2024, the New Jersey Labor Commissioner and Secretary of Agriculture will jointly decide whether to recommend that the minimum wage for agricultural workers increase to $15 per hour by January 1, 2027, as specified in the bill. If they cannot come to an agreement, a third member, appointed by the Governor with the advice and consent of the Senate, will break the tie. If there is a recommendation to disapprove of the scheduled increases or suggest an alternative pathway, the Legislature will have the ability to implement that recommendation by passage of a concurrent resolution.

The following chart offers additional guidance:

Effective Date Regular Hourly Employees Small Employers & Seasonal Workers Agricultural Workers Tipped Employees Training Wage
7/1/19 $10.00 $8.85 $8.85 $2.13 N/A
1/1/20 $11.00 $10.30 $10.30 $2.63 N/A
1/1/21 $11.00 $11.10 $10.30 $3.13 $9.90
1/1/22 $13.00 $11.90 $10.90 $4.14 $10.80
1/1/23 $14.00 $12.70 $11.70 $5.13 $11.70
1/1/24 $15.00 $13.50 $12.50 $5.13 $12.60
1/1/25 $15.00 +
CPI-W
$14.30 $13.40 $5.13 +
CPI-W
$13.50
1/1/26 $15.00 +
CPI-W
$15.00 $14.20 $5.13 +
CPI-W
$13.50 + CPI-W

The law also:

  • Requires employers to abide by an applicable wage order issued by the New Jersey Commissioner of Labor and Workforce Development.
  • Adds an overtime exemption for any individual employed in a bona fide executive, administrative, or professional capacity.

Read NJ A.B. 15 and the press release

Out of State Businesses Tax and Fee Exemptions

On January 31, 2019, New Jersey Governor Phil Murphy signed legislation (S.B. 2518) excluding out-of-state businesses and employees from certain taxes, fees, and business registration requirements when temporarily restoring critical infrastructure during a declared disaster or emergency.

The law took effect on January 31, 2019.

Read NJ S.B. 2518