Four Other States Pose Similar Compliance Conundrum with more Expected to Follow
From Gen X to Gen Z and the Millennials that occupy the space in between, there is one single polarizing labor issue breeding common ground – paid family and medical leave. While the federal statute for job-protected and UNPAID leave has been in place for 26 years, certain states have been trailblazers in offering paid family leave. Among these is New Jersey, which has had its own mandates since 2008 and recently implemented sweeping legislation that altered employer requirements extending from June 30, 2019 through July 1, 2020.
Currently joined by four other states with their own unique take of family and medical leave statutes – California, New York, Rhode Island and Washington – the Garden State is breaking new ground with additional job protections for those missing work to care for a newborn child or sick loved one. Passed in February, Bill A3975 redefines the parameters for family leave by expanding the term of “family member.” Effective June 30, 2019, employees can now invoke paid family leave for matters involving a foster child, in-laws, siblings and grandparents/grandchildren. In addition to broadening the definition of a blood relative, it also includes individuals with a close relationship to an employee that equates to that of a family member.
Among the other changes are the following:
- Companies with 30+ employees (down from 50+) are required to provide job protection for their employees and grant leave for up to 12 weeks in a 24-month period as of June 30, 2019
- Employers are limited on the amount of sick leave that can be used by employees (maximum of 2 weeks) before utilizing Family Leave and receiving Temporary Disability benefits as of July 1, 2019
- The wage base for calculation of the deduction will increase to 107 x Weekly Wage for funding – up from 28 x Statewide Average Weekly Wage ($34,400 in 2019) as of January 1, 2020
- The family leave benefit increases from 6 to 12 weeks during a 12-month period while the weekly benefit paid for Family Leave and Temporary Disability increases from 66.7% to 85% of an employee’s average weekly wage as of 7/1/2020
*Note: The law states the increase costs are funded by employees through deductions
While the premise of Paid Family and Medical Leave is designed to cultivate, attract and maintain a productive workforce, many employers with operations in New Jersey and beyond its borders – as well as states like New York with their own paid family leave laws – are faced with a hodge-podge of challenges. Aptly called a compliance conundrum, this situation is expected to become even more complicated as momentum builds in many other states as well as at the federal level for similar laws.
What happens when one state, New Jersey for example, offers its own paid family and medical leave law while another from which an employer may draw a good portion of its workforce or have satellite operations, does not? Or, what about the scenario where New Jersey has one law and New York State has another? One solution is to develop a uniform policy that follows the more generous of the conflicting laws.
Or, a company can choose to maintain different policies based on its different locations. The former is preferred while the latter often results in negative employee relations and a host of additional tax, wage and salary compliance challenges. For these reasons – and many more – employers with a workforce of 30+ people should seek advice from a trusted staffing and consulting advisor with specialized expertise in employee benefit plans as well as internal control operations.
Solving the compliance conundrum and protecting each employee’s rights – and the very foundation upon which family leave has been established – are of paramount importance to today’s employers and a Millennial population that will make up 75% of the workforce within the next decade. No longer an “amenity” benefit, Paid Family and Medical Leave is here to stay and will certainly take new shape in the months and years to come.
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