Workers, Employers will Pay Less in Temporary Disability, Family Leave Contributions in 2023
Yesterday, NJDOL announced a reduction in worker and employer contribution rates to the state’s Temporary Disability & Family Leave Insurance programs for 2023. Collectively, roughly 4 million NJ workers will save about $223 million per program next year!
The New Jersey Department of Labor and Workforce Development yesterday announced a reduction in worker and employer contribution rates to the state’s Temporary Disability Insurance and Family Leave Insurance programs for next year.
Workers will see their contribution rates for Temporary Disability drop to zero percent, from .14 percent, while the Family Leave rate will be cut by more than half, to .06 percent, from .14 percent.
In practical terms, workers will save an average of $56.25 in Temporary Disability contributions and $55.25 in Family Leave contributions in 2023.
Collectively, the state’s roughly 4 million workers will save approximately $223 million per program next year.
Participating employers in the state will be moved to a lesser contribution table and will see a collective reduction of $20 million in their Temporary Disability contributions for the fiscal year 2023. Employers do not contribute to the Family Leave program.
Temporary Disability and Family Leave contribution rates have been declining over the past three years largely due to increasing fund balances.
A law signed in 2019 (P.L. 2019, chapter 37) raised the level of wages subject to wage taxes effective January 1, 2020, for workers covered under the Temporary Disability and Family Leave Insurance programs to fund increases to these benefits.
The growing fund balances have outpaced benefit payments, with pandemic-related Unemployment Insurance programs contributing to a decrease in Temporary Disability and Family Leave claims.
“While I’m glad our Temporary Disability and Family Leave funds are robust, thus resulting in a decrease to contribution rates, it also indicates that workers may be missing the opportunity to utilize these vital programs,” said Labor Commissioner Robert Asaro-Angelo. “We’re working with our partners in the community to increase awareness of these critical resources so workers know their rights and take the time they need and deserve to care for themselves and their families without risking their job or paycheck."
Earlier this year, NJDOL awarded $1.1 million through its inaugural Cultivating Access, Rights, and Equity (CARE) grant to facilitate equitable outreach, education, and access to New Jersey’s many generous benefits and protections for eligible workers, including Temporary Disability Insurance and Family Leave Insurance.
The Legislature and Governor Murphy expanded the Temporary Disability and Family Leave Insurance programs on July 1, 2020, with eligible workers now able to receive up to 85 percent of their average weekly salary, an increase from two-thirds.
The maximum weekly benefit rate for each program has risen to $993 per week for 2022.
The amount of Family Leave benefit time was doubled to 12 consecutive weeks per year, and intermittent time off was increased to 56 days from the previous 42 days.
The expansion also allowed the option for workers with more than one job to take leave from one employer while continuing to work for another, so long as their usual work schedule is not exceeded.
Weekly benefit rates are based solely on wages earned from the employment from which the worker takes leave.
Workers can use Family Leave to bond with a new child or to care for any loved one who is blood-related or a family-like relation.
Temporary Disability can be used for pregnancy, childbirth, or a serious health condition.
To qualify for Temporary Disability or Family Leave benefits in 2022, an applicant must have earned at least $240 per week for 20 base weeks, or alternatively, have earned at least $12,000 during the base weeks.
For more information on Temporary Disability and Family Leave, click here.