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Citing the need to protect small employers from lawsuits and higher operating costs, NJBIA on Thursday opposed a bill that would require small businesses to comply with the job reinstatement mandate of the New Jersey Family Leave Act, which currently applies only to companies with 30 or more workers. 

The bill, A-5166, released by the Assembly Labor Committee, originally required even employers with as few as one employee to guarantee job reinstatement to any employee who takes a 12-week family leave. The legislation was amended in committee to change the threshold to five or more employees. 

NJBIA Vice President of Government Affairs Elissa Frank said that even with the amendments, NJBIA remains opposed to the bill. 

“Small businesses – many of which are not financially equipped to bear increased employee absenteeism – will likely experience higher labor costs occasioned by retaining and training employees to substitute for absent employees,” Frank said in testimony to the committee. “This will make New Jersey unattractive for new businesses and impose further hardship on those already here. 

“Furthermore, this legislation will likely cause an increase in employee legal claims against their employer,” Frank noted. “Currently, the Paid Family Leave Law expressly states that an employee shall not have a common law cause of action against an employer based on its failure or refusal to restore an employee to employment after the period of paid family leave benefits expires.” 

The New Jersey Family Leave Insurance program provides partial wage replacement but does not guarantee employer-approved time off or job protection. The separate New Jersey Family Act does require job reinstatement after an unpaid leave, but that law currently applies only to companies with 30 or more employees who are in a better position to provide coverage for an employee during a prolonged absence and reinstate him or her to their job when they return. 

Bill A-5166 changes existing law by mandating that all employers of five or more employees provide job reinstatement once a paid leave period has ended. As a result, employees who are denied reinstatement upon returning from a period of paid leave will have a common law right of action against their employer, and small businesses will bear the cost of defending those claims, Frank said. 

“These litigation costs can be unduly burdensome, especially for small businesses who may be unable to restore an employee to employment,” Frank said.