The New Jersey Business & Industry Association opposed legislation approved by the Assembly today that would change the Paid Family Leave law to increase benefits, expand eligibility to more workers, and double the length of a paid leave to 12 weeks.
NJBIA President & CEO Michele Siekerka said the Office of Legislative Services’ fiscal analysis determined the program, which cost $88.7 million in 2016, would have cost $236 million if the proposed changes had been in effect then —a $147.3 million increase.
“Increasing the cost of the program without adjustments to the payroll tax that pays for it all means the fund will soon be depleted as more employees qualify to take a longer leave and receive increased benefit checks,” said Siekerka. “If this legislation is enacted into law, there’s no doubt the Legislature will look to the business community to keep the fund from going broke.”
Siekerka said doubling the length of time that an employee can be away from work from six weeks to 12 weeks would be extremely disruptive to a small business’ operations. Moreover, the legislation also lowers the exemption threshold from 50 to 20 employees, meaning more small businesses will be negatively impacted.
“This legislation will make it more difficult and more expensive to run a business in New Jersey,” Siekerka said. “New Jersey needs policies that encourage new businesses and the expansion of existing businesses. Unfortunately, this is one more example of a policy that will drive businesses away from here.”
Siekerka noted New Jersey is one of only three states that now have a paid family leave benefit. The others are Rhode Island and California, in addition to the District of Columbia. New Jersey is also one of only six states to even provide temporary disability benefits.
“This legislation will make New Jersey less affordable for the business community and less competitive with our No. 1 outmigration state of Pennsylvania,” Siekerka said.
The current New Jersey Paid Family Leave program is available to employees who need to care for a newborn or newly adopted child, or a severely ill spouse, domestic partner, or parent. The legislation, however, would expand the categories of family members to also include siblings, parents-in-law, grandparents, and grandchildren.
The benefit rate would increase from 66 percent of an employee’s weekly wage to 90 percent of his or her average weekly wage, subject to $932 weekly cap. The length of a paid family leave would double from six weeks to 12 weeks.
“Small businesses will have to pay overtime to other workers or hire replacement employees for longer periods of time if this legislation becomes law,” Siekerka said. “This will make New Jersey unattractive for new businesses and impose further hardship on those already here.”
The legislation, A-4927, was approved by a 49-23 vote with three abstentions and now goes to the Senate for final legislative approval.