Employee contributions to a state family leave program will drop to zero amid a glut of funds, the state's labor commissioner said Friday. (Photo courtesy of New Jersey Governor's Office)
New Jersey will slash employee contribution rates to state family leave and temporary disability insurance amid a glut of funds and lagging utilization, Labor Commissioner Robert Asaro-Angelo announced Friday.
Temporary disability insurance rates will drop from 0.14% to zero, while family leave contribution rates will decrease by more than half, from 0.14% to .06%. The changes are expected to save workers an average of $111.50 — or $223 million statewide — in 2023.
Though he lauded the drop in rates, Asaro-Angelo said in a statement he worries the decline signals “workers may be missing the opportunity to utilize these vital programs.”
“We’re working with our partners in the community to increase awareness of these critical resources so workers know their rights and take the time they need and deserve to care for themselves and their families without risking their job or paycheck,” he said.
Pandemic-related unemployment programs contributed to the decline in family leave and temporary disability utilization, the department said.
Employers’ contribution rates will also decrease, with the move to smaller rates expected to cut their total contributions by $20 million in the current July-to-June fiscal year.
Currently, employers pay between 0.1% and 0.75% on the first $39,800 earned by each employee during the 2022 calendar year to fund temporary disability benefits. They do not contribute to the Paid Family Leave Program.
State Democrats moved to expand New Jersey’s family and temporary disability leave programs shortly before the pandemic, approving legislation that raised the maximum payout to 85% of a worker’s average weekly wage, up from two-thirds. Such payments are subject to a weekly cap, which this year rose to $993.
It also doubled the maximum amount of family leave available to workers, raising it to 12 consecutive weeks.
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