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Temporary Disability Insurance and New Jersey Family Leave

  • LABOR

What Human Resources and Employers Need to Know

NJ Temporary Disability Insurance provides benefits to New Jersey employees who are unable to work due to a physical or mental health condition or other disability not related to their job, including recovery from pregnancy/childbirth and COVID-19.

NJ Family License Insurance provides benefits to New Jersey employees who are unable to work because they need to bond with a new child, care for a family member who has a physical or mental illness (see the law's generous definition of “family”) at myleavebenefits.nj.gov), or to address certain issues related to domestic or sexual violence.

The Role of the Employer

  • Employers must participate in these state public insurance programs and deduct payroll taxes for employees working in NJ, or employers may choose to provide employees with coverage through a private insurance plan that meets NJ requirements. The federal government is exempt. Temporary disability insurance is optional for local governments (for example, counties, townships, and school districts) but these employers must participate in the State Family Leave Insurance plan or provide a private plan. Long-term employees outside of NJ are generally not covered, but must apply to see if they are eligible.
  • Starting in 2019, employers are not required to complete the “employer portion” of the application. When an employee is approved for Temporary Disability Insurance or Family Leave Insurance benefits, the employer receives an approval notice in the mail. Additionally, for employees applying for Temporary Disability Insurance benefits, the employer will receive a “DS-7C” form each time benefits are issued, and we advise employers to verify its accuracy. Any incorrect payment of benefits must be reported immediately to the Division. We suggest keeping a separate file for each employee receiving Temporary Disability Insurance benefits and adding to it DS-7C received for each benefit payment. This way you will be able to keep track of the charges per employee throughout the life of the claim.

Disclosure of Claims Information

We can only provide claim information to the employee, unless you are listed as a representative on the request for reimbursement. We contact employers to request information on an as-needed basis by submitting forms.

Information we may request from an employer may include:

  • Federal Employer Identification Numbers.
  • Paid time off, vacation or sick leave used.
  • The intermittent days that the employee has worked.
  • The employee's last work date.
  • Confirmation of valid wages.
  • Wages paid to your employee during their period of disability or family leave.

The application

It is the worker's responsibility to complete Parts A and B of the application, and Parts C and D, if applicable, for family leave insurance. We encourage the employer to help the employee through the process, but it is the employee's responsibility to submit a complete application.

Paid time off before disability and family leave

Employers are not prohibited from requiring employees to use accrued paid time off before applying for Temporary Disability Insurance benefits. Employers cannot require employees to use leave mandated under NJ's earned sick leave law (learn more at mysickdays.nj.gov).

The State of NJ can only require state employees to use up to two weeks of accrued sick leave before receiving Temporary Disability Insurance benefits, although the State of NJ cannot require state employees to use their last week of sick leave before receiving Temporary Disability Insurance benefits.

Employees can choose to use accrued paid time off before applying for Family Leave benefits, although employers cannot require it. If an employee chooses to use paid time off before applying for Family Leave Insurance benefits, it will not reduce the maximum duration of benefits to which the employee is entitled.

Can you charge our company/organization?

In cases of Temporary Disability Insurance claims, the benefits are charged to the experience valuation account of the last employer for whom the applicant worked before the start of his claim. The law does not provide for other liability criteria, such as the length of employment, whether the job was considered full-time or part-time, the amount of earnings, or the circumstances surrounding the separation from the last employer. For family leave, the employer's experience rate does not apply.

What should I know about income tax?

Temporary Disability Insurance: Year-end statements are available online for employers to download in January for the prior calendar year. Only a portion of Temporary Disability Insurance benefits are taxable by the federal government. They are considered third-party sick pay or other wages, and it is your responsibility to report the information on your employee's W-2.

For Family Leave Insurance: Each January, Form 1099-G is available online for all employees who received Family Leave Insurance benefits during the previous year to download and use when filing their federal income tax return. . These benefits are taxable by the federal government.

Partial return to work for Temporary Disability Insurance

With employer approval, employees who have been unable to work due to a disability may return to work part-time and continue to receive Temporary Disability Insurance benefits (effective June 2020).

Family Leave Insurance benefits for part-time employees

Workers with more than one job can collect Family Leave Insurance benefits in respect of leave taken from work with one employer while continuing to work for another, provided the employee does not exceed their regular work hours at the second job. The amount of the worker's weekly benefit will be based solely on the salary of the job from which the leave is taken (as of July 1, 2020).

Benefits for new and expecting parents

Temporary Disability Insurance can provide financial benefits to pregnant mothers when they need to stop working before giving birth and while they recover. Parents can go directly from a pregnancy-related Temporary Disability Insurance application to a Family Leave Insurance application to bond with their newborn baby. Family Leave Insurance is also available to new parents and non-biological parents to bond with their newborn, newly adopted child or foster child.

Benefits related to COVID-19

An employee may be entitled to Family Leave Insurance benefits if their relative family member certifies that the family member is in need of care due to COVID-19. Additionally, an employee may be entitled to Temporary Disability Insurance benefits if the doctor certifies that the employee is unable to work because she has COVID-19 or is at high risk of contracting COVID-19 due to an underlying condition.

Do these programs provide employment protection?

These programs are wage replacement and do not provide employment protection. However, your company and your employee may be covered by the Federal Family and Medical Leave Act (FMLA), NJ Family and Family Leave Act (NJFLA), and/or the Security and Financial Empowerment (SAFE) Act.

Note that a parent can take up to 12 weeks of paid or unpaid job-protected FMLA leave for pregnancy and childbirth recovery, and then an additional 12 weeks of paid or unpaid NJFLA job-protected leave to bond with your baby or care for your baby after your doctor certifies that you are fit to return to work or have exhausted your FMLA leave (whichever comes first).

Your employee may be entitled to Temporary Disability Insurance and Family Leave Insurance wage replacement benefits, whether or not he or she is covered by these laws. Additionally, if an employer retaliates against an employee for claiming or attempting to claim these benefits, the employee has the right to take private legal action.

Get more information in myleavebenefits.nj.gov/jobprotection.

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