Less than three years after enacting reforms that expanded New Jersey’s temporary disability and family leave programs, lawmakers are looking to change some numbers.
The Senate Labor Committee on Monday approved a bill that would increase the weekly pay cap for those on furlough from 70% of the state’s average weekly wage to 85%. Under the bill, the maximum weekly benefit for a furloughed worker would increase by about $200.
“We have a system right now that’s supported where some get 85%, and some get 70%,” said Sen. Fred Madden, chairman of the committee. “I just think it’s unfair.”
New Jersey offers workers up to 26 weeks of temporary disability insurance and up to 12 weeks of paid family leave, which can be used to bond with new children or care for an ill or injured loved one. . In each case, workers receive a weekly benefit of 85% of their weekly wages, up to a cap of $993. The cap is 70% of the state’s average weekly wage of $1,418.
At 85% of the average state wage, the maximum benefit would increase to $1,206 per week.
The bill, which was approved by the committee in a 3-1 vote with one abstention from Sen. Tony Bucco (R-Morris), was opposed by one of the Republican members of the panel and the hesitation of another. Critics warn that the new plan would cost workers and their employers more in taxes.
New Jersey’s temporary disability leave program is funded by a payroll tax from workers and employers, while the family leave program is paid for solely by employees. Both rates are set at the beginning of the fiscal year and aim to collect approximately 120% of each fund’s projected expenditures.
“If ever there was a time when we could do something to make sure there was no impact on our taxpayers, especially low and moderate income ones, it would seem like the time would be,” Bucco said. “Over 63% of our state lives paycheck to paycheck, and with inflation, that number is likely to increase. I’m just worried about that.
In 2019, the state doubled family leave time and weekly payments by increasing tax revenue for the programs.
The debate is far from over. Because it will likely require an appropriation, the bill is now before the Senate Budget Committee. It does not yet have an equivalent in the Assembly, and the Office of Legislative Services has yet to issue a tax memo on how the larger payments would affect tax collection.
On Thursday, lawmakers also advanced a measure that would force the state to use federal aid from the U.S. bailout to repay federal government loans used to feed the unemployment fund. The fund, used to pay unemployment benefits, has been emptied by exorbitant unemployment claims during the pandemic.
The bill would also block an increase in a tax on employers that is set to take effect in fiscal year 2024, although it maintains an increase that will become active in the next fiscal year. The tax increases are intended to replenish the trust fund.
Business groups and a few others back the idea of using federal aid to pay off loans and block the 2024 tax hike, but the plan is opposed by progressive advocates, who say the stimulus money should be used to increase housing assistance and other worker assistance programs. .
“To pay off a $580 million loan with federal emergency assistance aimed at the most immediate needs of workers — who have had a significantly more severe impact from the pandemic — is worse than short-sighted,” Sheila Reynertson said. , senior policy analyst at progressive think tank New Jersey Policy Perspective. “It’s unfair and it’s insulting to essential workers.”