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CLIENT ALERT: May 2008 Employer Alert The purpose of this e-mail alert is to let you know that Governor Jon Corzine signed the New Jersey Paid Family Leave Act on May 2, 2008 making New Jersey the third state in the nation to give employees six (6) weeks of paid leave to care for a newborn child or sick family member. The Paid Family leave Act takes effect on July 1, 2009 and employees may start taking paid family leave then. Unlike the Federal Family and Medical Leave Act (FMLA), and the New Jersey Family Leave Act (NJFLA), which apply only to employers with fifty (50) or more workers, the New Jersey Paid Family Leave Act applies to all employers, regardless of size. The New Jersey Paid Family Leave Act is actually an amendment to the Temporary Disability Insurance statute. Family leave will be funded from employee wage deductions of .09 percent annually, or about 65 cents a week, commencing January 1, 2009. The estimated cost to employees is approximately $33 a year. Under the paid family leave amendments, employees will be eligible to receive two-thirds of their average weekly wage, up to $524 per week, for up to six weeks a year to care for a newborn child, a newly adopted child, or a family member with a serious health condition. A "family member" includes an employee's child, parent, spouse, domestic partner, or civil union partner. Paid family leave is not available for an employee's own serious health condition. In those circumstances, New Jersey's statutory temporary disability benefits may be available, provided the employee's condition qualifies Presently, the Federal Family and Medical Leave Act (FMLA), and the New Jersey Family Leave Act (NJFLA), allow workers up to twelve (12) weeks per year to care for a family member. Both of these Acts, however, apply only to employers with fifty (50) or more workers and, in both cases, the leave is unpaid. New Jersey also allows women who leave work for the birth of a child to collect disability for up to ten (10) weeks. The money for this leave comes from the state’s temporary disability insurance fund. All employers are subject to the Temporary Disability Benefits Law regardless of the number of their employees. For employers with 50 or more employees, paid family leave will run concurrently with NJFLA leave and generally will run concurrently with FMLA leave for a family member. Moreover, because the NJFLA and FMLA provide job protection for more than six weeks, an employee working for an employer covered by those laws will have job protection rights during and after paid family leave. Importantly, the Paid Family Leave Act does not provide job protection. Therefore, the employer can terminate the employee for no reason or any reason at all except for reasons that violate the law or public policy. A discharge in retaliation for exercising the right to paid leave would seem to violate the clear public policy set forth in the legislation in favor of allowing even employees of small businesses to take leave to care for a sick family member without financial hardship. Despite the characterization of the leave as unprotected, terminations against pubic policy or against the law will still subject the employer to exposure for wrongful discharge claims. This is true even under protected leave taken pursuant to the existing New Jersey Family Leave Act (FLA) and the Federal Family and Medical Leave Act (FMLA), the employer retains the right to let the employee go during the leave period if the employer can demonstrate (1) that the employee would have lost his/her job any way due to a reduction in force; or (2) that the discharge was the result of a legitimate operation of a bona fide system of layoff and recall. Such employers cannot, however, terminate employees in retaliation for exercising their right to take leave even though they are not in a protected class. The New Jersey Department of Labor estimates that 38,000 New Jersey workers will use paid family leave each year. Employers believe that number will be much higher. When filling a job permanently, the best course for you, the employer (big or small), is to be able to demonstrate business necessity. It would also be wise to clearly state in your employee handbook that jobs left vacant due to family leave are not guaranteed or “saved” for the employee. This Laddey, Clark & Ryan, LLP Client Alert provides information of general interest to our readers. It is not intended, and should not be used, as a substitute for consultation with legal counsel. If you have any questions regarding specific issues raised in this Employer Alert, you may contact Thomas Ryan, Esq. or Linda Day, Esq. of Laddey, Clark & Ryan's Employment and Labor Practice Group at (973)729-1880.
The Employment and Labor Practice Group
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