SENATE LABOR COMMITTEE

STATEMENT TO

SENATE, No. 2249

with committee amendments

STATE OF NEW JERSEY

DATED: FEBRUARY 5, 2007

      The Senate Labor Committee reports favorably and with committee amendments Senate Bill No. 2249.

      This bill extends the State's existing temporary disability insurance (TDI) system to provide workers with family temporary disability leave benefits to care for members of the worker’s family unable to care for themselves, including sick family members and newborn and newly adopted children.

      The bill also provides up to 12 weeks of TDI benefits for a worker taking leave to participate in providing care certified to be necessary for a family member of the worker suffering a serious health condition, including providing psychological comfort and arranging third party care for the family member; or taking leave to be with a child of the worker during the first 12 months after the child's birth or placement for adoption with the worker's family.

      The bill applies to all private and governmental employers subject to the “unemployment compensation law” (R.S.43:21-1 et seq.), including local governmental employees who choose to opt out of the regular TDI program.

      The weekly benefit amount paid under the bill is the same as the weekly amount for TDI benefits during a worker's own disability and is subject to the same one-week waiting period.  The employer may require that the employee take up to two weeks of available sick or vacation pay or other fully-paid leave provided by the employer before receiving benefits under the bill, and may require that the period of benefits under this bill be reduced by the amount of time in which fully paid leave is provided.  If the employee is required to take fully paid leave, the bill requires that the employee be permitted to use the first week worth of the fully paid leave during the one-week waiting period that precedes the family leave benefits.  If the leave is for care of a child after birth or adoption, the worker is required to give notice not less than 30 days before the leave.

      During the first year following enactment, the bill raises additional revenues for the TDI fund necessary to pay family leave benefits through an assessment paid by workers of 0.1% of each worker's wages up to an amount equal to the Social Security tax base.  It is estimated that with that annual assessment rate of $1 per $1,000 of earnings under that tax base, which was $94,200 in 2006, the average worker would pay less than $1.00 per week in assessments.  In each successive year, the Commissioner of the Department of Labor and Workforce Development would set a contribution rate for workers based on estimates of the expected cost of benefits and administration, less funds left over from the preceding year. The funds raised through that assessment would be deposited into an account to be used only for family leave benefits and their administration, including the cost of an outreach program to eligible employees and the cost of issuing annual reports on the use of the benefits.  Neither the assessments nor the benefits would be considered in determining the TDI tax rates of employers.

      Moreover, the bill reaffirms the State’s commitment to sustaining the State-operated, nonprofit State disability benefits plan, which has been found to be a highly efficient and cost-effective means of ensuring the availability of coverage for employers and workers with low overhead costs and impartial claims processing.

Committee Amendments

      The committee amendments further clarify that a covered employer includes any governmental entity or instrumentality which does not elect to become a covered employer under the regular TDI program.     Furthermore, the committee amendments specify that only the monies in the “Family Leave Disability Account” may be used for family leave benefits or for the administration of family leave benefits, except that during the first year of the program an amount not to exceed $5 million may be transferred from the revenues and used for administrative purposes.  The amendments provide however that any such account transfer shall be repaid during a period beginning not later than January 1, 2009, and ending not later than December 31, 2009.  Moreover, it states that no monies, other than the funds in the “Family Disability Leave Account,” shall be used under any circumstances after December 31, 2008 for the payment of benefits during periods of family disability leave or for the administration of those payments, including for the administration of the collection of contributions.

      Finally, the committee amendments add civil union partners as eligible beneficiaries under the bill to reflect the recent changes to the law recognizing civil unions.  See P.L.2006, c.103 (C.37:1-28 et al.).