N.J. Moves To The Front Of The Paid Time Off Line

April 09, 2008 Employment Law360

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Over the course of the last few years, a debate has raged in the New Jersey State House concerning the perceived need for New Jersey to be one of the few states in the nation to establish a state-administered system to provide paid time off benefits to employees, in both the private and public sector, to take time off to assist their family members who are unable to care for themselves, including newborns and newly adopted children.

That debate has resulted in the passage of Paid Family Leave legislation, which New Jersey Governor Jon Corzine is expected to sign.

The Paid Family Leave legislation is designed to provide up to six weeks (or 42 days if the leave is “intermittent”) of benefits – at the same level as those provided under New Jersey’s Temporary Disability Benefits law (TDI) – for an employee who takes leave to: provide care certified to be necessary for a family member of the employee suffering from a serious health condition; or be with his or her child during the first 12 months after the child’s birth or placement for adoption with the employee’s family.

The six-week, state-paid benefit may be reduced by up to two weeks of any employer-paid leave.

While the New Jersey Department of Labor and Workforce Development (DOL) will determine whether an employee is entitled to the benefit under the law in a given set of circumstances, employers must not only know that this benefit is available, but they need to understand the extreme reach of Paid Family Leave as well as its application.

In order to do so, employers need to understand the following definitions under the law:

– “Child” means a biological, adopted, or foster child, stepchild or legal ward of a covered individual, child of a domestic partner of the covered individual, or child of a civil union partner of the covered individual, who is less than 19 years of age or is 19 years of age or older but incapable of self-care because of mental or physical impairment.

– “Domestic partner” means a person who is in a relationship that satisfies the definition of a domestic partnership under the law. The law sets out a detailed list of criteria that must be satisfied in order for the relationship to be considered a domestic partnership.

– “Civil union” means a civil union as defined in the New Jersey Civil Union Act (in essence the legally recognized union of two eligible individuals of the same sex).

– “Family member” means a child, spouse, domestic partner, civil union partner, or parent of a covered individual.

– “Family temporary disability leave” means leave taken by an eligible employee from work with an employer to (1) participate in the providing of care for a family member of the employee made necessary by a serious health condition of the family member; or (2) be with a child during the first 12 months after the child's birth, if the employee, or the domestic partner or civil union partner of the employee, is a biological parent of the child, or the first 12 months after the placement of the child for adoption with the employee.

“Family temporary disability leave” does not include any period of time in which an employee is paid benefits under TDI because the employee is unable to perform the duties of his or her employment due to the employee's own disability.

– “Health care provider” means a health care provider as defined in the New Jersey Family Leave Act (any person licensed under federal, state, or local law, or the laws of a foreign nation, to provide health care services; or any other person who has been authorized to provide health care by a licensed health care provider).

– “Parent of a covered individual” means a biological parent, foster parent, adoptive parent, or stepparent of the eligible employee or a person who was a legal guardian of the eligible employee when the eligible employee was a child.

– “Placement for adoption” means the time when an eligible employee adopts a child or becomes responsible for a child pending adoption by the eligible employee.

– “Serious health condition” means an illness, injury, impairment, or physical or mental condition that requires: inpatient care in a hospital, hospice, or residential medical care facility; or continuing medical treatment or supervision by a health care provider.

– “12-month period” means, with respect to an employee who establishes a valid claim for disability benefits during a period of family temporary disability leave, the 365 consecutive days that begin with the first day that the employee first establishes the claim.

Obviously, the DOL will have a great deal of latitude in interpreting these definitions, and employers should receive more guidance from the DOL in the near future.

Employees are required to provide advance notice to employers of their need to take leave under the law. Employees seeking leave to care for a child after birth or placement for adoption are required to provide the employer at least 30 days prior notice.

However, if the leave is for the care of a sick family member, the employee is required to schedule, when possible, the leave in a manner to minimize the disruption of the employer’s operations, and give, where possible, 15 days prior notice of the need for leave where the leave will be intermittent.

While the Paid Family Leave law does not mandate that an employer maintain the employee’s position for any period of time, the law does addresses, to a certain extent, employers’ concerns regarding its interplay with both the New Jersey Family Leave Act (FLA) and the federal Family and Medical Leave Act (FMLA) by requiring, to the extent otherwise permissible, that these statutory requirements run concurrently.

As a result, while the Paid Family Leave law provides a compensation entitlement, it does not in and of itself provide a leave entitlement similar to the FLA or FMLA.

Employers must be cautious about not reinstating an employee who takes paid family leave. While the legislation states that it is not intended to create a reinstatement entitlement, it provides only a partial safe-harbor for employers who fail to reinstate an employee. In this regard, the legislation provides that it does not intend to create any right for an employee to take action against an employer in tort, for breach of an implied employment agreement, or under common law.

This safe-harbor only applies, however, to employers with fewer than 50 employees. There are additional concerns raised by the limited nature of the safe-harbor that ultimately may create claims against larger employers as well.

This benefit is to be funded through a payroll tax. As of now, the tax will only be required to be paid by employees.

Under the law, the maximum contribution by an employee to the state fund will be $33 or approximately 64 cents per week (based upon 2008 taxable wage figures). On the other hand, the benefit amount – for each week of the maximum six-week benefit period – will be $524, based upon the 2008 benefit levels.

It is important to note that while employers will need to commence collecting and remitting the tax to the state for this benefit effective Jan. 1, 2009, employees will not be able to apply for and receive these benefits until July 1, 2009.

Of significant concern for employers and taxpayers in general in New Jersey is the law's authorization of the borrowing of up to $25 million by the DOL to fund the program’s start-up costs at a time when the state is in a fiscal crisis.

The DOL will be issuing implementation regulations fleshing out the administrative details and forms in the near future.

To the extent employers have any questions or concerns relating to New Jersey Paid Family Leave, or its interaction with the FLA and/or FMLA or the interplay of these laws with workers’ compensation benefits, TDI benefits and/or employer paid time off policies, they should seek the advice of legal counsel.