Employee Cost for Disability, Family Leave Benefits Currently Set to Rise in New Jersey

According to a report from the New Jersey Monitor, the employee share of costs for temporary disability benefits and family leave benefits are set to rise. The increase could become as soon as 2025 as state officials have reported an expected $442 million shortfall in the state’s disability benefits fund. Within this article, our New Jersey employment lawyer provides an overview of the issues, the expected changes, and your rights to file for disability/family leave benefits.

State Funding Shortfall: Disability/Family Leave Benefits

 New Jersey has a dedicated fund that is used to cover the costs associated with employee disability/family leave benefits. That fund is running low. It is predicted to have a $442 million deficit by the end of the fiscal year (FY) starting July 1, 2025. Department of Labor (DOL) officials recently highlighted this issue before the Senate Budget Committee early this week. It will be covered with an inter-agency bridge loan. However, disability rates will now rise on workers.

 Statute Requires State to Raise Rates on Workers 

Here is what is projected to happen to worker costs later this year. The average annual temporary disability insurance cost for workers is expected to rise from close to zero to $141.00. For family leave benefits, the average annual cost for workers is expected to rise from $74.00 to $242.00. It should be noted that costs are determined, in large part, by an employee’s salary. Higher-wage employees pay higher disability/family leave costs. The necessity for rate increases stems from statutory constraints that tie the hands of state officials. Predetermined formulas are in place. Notably, a state labor official referred to this as a “perfect storm” of rising costs. The COVID-19 pandemic was cited as a factor in the unexpectedly large rate increase on employees.

 New Jersey has Comprehensive Temporary Disability and Family Leave Benefits 

Given that employees in New Jersey are set to pay more for their benefits in the coming year, it is crucial that they understand what they are getting in exchange. Here is an overview:

• Temporary Disability: This program provides financial assistance to New Jersey workers who are unable to work due to a non-work-related illness or injury, offering a portion of their usual wages to help manage their financial needs during recovery.
• Family Leave: Family Leave insurance allows employees in New Jersey to take paid time off to care for a newborn, newly adopted child, or a sick family member, ensuring they receive partial wage replacement during such critical times of family care.

 Contact Our New Jersey Employee Rights Attorney Today

At Poulos LoPiccolo PC, we are proud to put employee rights first. If you have any specific questions or concerns about temporary disability leave or family leave, please do not hesitate to contact us today to arrange a completely confidential initial appointment. With a law office in Monmouth County, we handle employee rights cases throughout the State of New Jersey.

Source:

newjerseymonitor.com/2024/04/18/workers-will-soon-pay-more-for-temporary-disability-family-leave-benefits/