N.J. workers would see higher family leave, disability payments under bill

By: - March 8, 2022 7:01 am

Payments for temporary disability and family leave are paid for by taxes on employers and workers. (Photo by Jeenah Moon/Getty Images)

Less than three years after the enactment of reforms that expanded New Jersey’s temporary disability and family leave programs, lawmakers are looking to tweak some numbers.

The Senate Labor Committee on Monday approved a bill that would raise the weekly payment cap for individuals on such leave from 70% of the state’s average weekly salary to 85%. Under the bill, the maximum weekly benefit for a worker on leave would rise by about $200.

“We have a system right now that’s being supported where some get 85%, and some get 70%,” said Sen. Fred Madden, the committee’s chairman. “I just think it’s unfair.”

New Jersey provides workers with up to 26 weeks of temporary disability insurance and up to 12 weeks of paid family leave, which can be used to bond with new children or care for a sick or injured loved one. In each case, workers are paid a weekly benefit of 85% of their weekly wage, to a cap of $993. The cap represents 70% of the state’s average weekly wage of $1,418.

At 85% of the average state wage, the maximum benefit would increase to $1,206 per week.

The bill, which cleared the committee in a 3-1 vote with one abstention from Sen. Tony Bucco (R-Morris), faced opposition from one of the panel’s Republican members and hesitation from another. Critics caution the new plan would cost workers and their employers more in taxes.

New Jersey’s temporary disability leave program is funded by a payroll tax on workers and employers, while the family leave program is paid for solely by employees. Both rates are set at the beginning of the fiscal year and seek to collect about 120% of each fund’s projected expenditures.

“If ever there was a time where we could do something to make sure there was no impact on our taxpayers, especially those in the low- and moderate-income ranges, it would seem that this would be the time,” Bucco said. “Over 63% of our state lives paycheck to paycheck, and with inflation, that number’s probably going to go up. I just worry about that.”

In 2019 the state doubled family leave time and weekly payouts by raising the programs’ tax collections.

The debate is far from over. Because it will likely require an appropriation, the bill now goes to the Senate Budget Committee. It does not yet have a counterpart in the Assembly, and the Office of Legislative Services has yet to post a fiscal note on how the larger payments would affect tax collections.

Lawmakers on Thursday also advanced a measure that would require the state to use federal aid granted by the American Rescue Plan to pay off loans from the federal government used to refill the unemployment trust fund. The fund, used to pay jobless benefits, was drained by sky-high unemployment claims during the pandemic.

The bill would also stall an increase to a tax on employers set to go into effect in fiscal year 2024, though it maintains an increase that will become active in the coming fiscal year. The tax hikes are intended to replenish the trust fund.

Business groups and some others support the idea of using federal aid to repay the loans and stall the 2024 tax hike, but the plan is opposed by progressive advocates, who say stimulus money should be used to boost rental assistance and other aid programs targeted at workers.

“Paying back a $580 million loan with federal emergency aid meant for the most immediate needs of workers — who experienced a substantially more severe impact from the pandemic — is worse than short-sighted,” said Sheila Reynertson, senior policy analyst at progressive think-tank New Jersey Policy Perspective. “It’s inequitable and it’s insulting to the essential workforce.”

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Nikita Biryukov
Nikita Biryukov

Nikita Biryukov most recently covered state government and politics for the New Jersey Globe. His tenure there included revelatory stories on marijuana legalization, voting reform and Rep. Jeff Van Drew's decamp to the Republican Party. Earlier, he worked as a freelancer for The Home News Tribune and The Press of Atlantic City.

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