NJ lawmakers consider paid-leave benefits boost for middle class
TRENTON – State lawmakers are considering a proposal to expand temporary disability and paid family leave benefits for middle-income earners by more than $200 a week.
A bill, S508, endorsed by the Senate Labor Committee would raise the potential maximum weekly benefit to $1,206, rather than $993. As the benefit amounts to 85% of a worker’s weekly income, the proposed change would give a boost to workers with annual salaries of roughly $60,000 to $73,700.
Sen. Fred Madden, D-Gloucester, said the benefits programs would be better if more people could receive 85% of their paychecks while on disability or family leave.
“We have a system right now that’s being supported where some get 85% and some get 70%. I just think it’s unfair,” Madden said.
Sen. Mike Testa, R-Cumberland, said the state government is flush with cash and should put in money to pay for the increases, rather than potentially hike taxes on workers when the fund runs low on cash.
“Asking all New Jersey workers, including the low-income residents who are seriously struggling due to record-high levels of inflation, record-high gas prices to fork over even more of their hard-earned dollars … in my opinion is both unfair and unnecessary,” Testa said.
“I just worry about the unintended consequences that may arise as a result of something that I think obviously is being done for the benefit of our residents but could have the opposite effect,” said Sen. Anthony Bucco, R-Morris.
Bill sponsor Sen. Joe Cryan, D-Union, said the pandemic underscored the need for programs like paid family leave and temporary disability.
“This bill will create a lifeline for people in a time of dire need,” Cryan said. "The benefits support the economic stability of working families and address the health and well-being of employees so they can care for family members. They should not be fearful of losing their jobs or experiencing a loss in their wages.”
Family leave carries a small tax that varies each year – equal to $1.40 for every $1,000 in salary now, though it was double that in 2021. That tax is paid by workers, only.
Temporary disability is also funded by a similar small payroll tax on workers. This year, that tax is equal to the family leave tax, though last year’s TDI tax rate more than three times higher. Employers are also charged a tax to fund the temporary disability program.
Yarrow Willman-Cole, the workplace justice program director for New Jersey Citizen Action, supports expanding the maximum benefit further into the middle class.
“This is also of particular benefit for middle-income workers in a high-cost state like New Jersey. It’s really meaningful,” Willman-Cole said.
Willman-Cole said it would be fair to maximize benefits for more workers as the tax was expanded significantly in 2019.
In 2019, before paid family leave was expanded, the tax applied to the first $34,400 in wages and totaled around $28 a year per worker. It now applies to $151,900 in wages and can approach $213 a year apiece for TDI and family leave. Last year, those taxes maxed out at $650 for TDI and $387 for FLI.
“The benefit here is to say, ‘OK, you are contributing more. Let’s in fact ensure that you’re also able to collect that 85% of your average wage,’” Willman-Cole said.