Small Business Raise Doubts About New Jersey Plan to Expand Paid Family Leave

New Jersey lawmakers are considering expanding the state’s paid family leave laws to cover more employers, including many small businesses. However, there are a number of small companies that are raising concerns. The New Jersey Business and Industry Association recently announced its opposition to the reform package. Here, our New Jersey employment attorney provides a more detailed overview of the case.

Background: An Overview of the New Jersey Paid Leave Family Law 

As a starting point, it is useful to know that New Jersey always has one of the most comprehensive paid family leave laws in the entire country. Indeed, the state provides paid family leave through the state’s Family Leave Insurance (FLI) program. Eligible employees can receive partial wage replacement when they take leave to bond with a new child or care for a seriously ill family member. Under current rules, most covered workers can take up to 12 weeks of paid leave in a 12-month period. The benefits are funded entirely by payroll deductions, not employer contributions.

Note: Under the existing FLA, companies with 30 or more employees must provide job-protected leave. Under federal FMLA, the threshold is generally 50 or more employees. 

A Big Change is Proposed (Expansion of Coverage for Paid Family Leave in New Jersey)

Lawmakers are now considering expanding job-protected paid family leave to smaller employers. The proposal would lower the threshold for mandatory job protection to companies with as few as 15 employees. However, business groups warn that these changes would significantly increase legal obligations for small employers already operating with tight staffing and slim margins.

Small business leaders argue that expanding paid family leave protections will create operational challenges. The New Jersey Business and Industry Association (NJBIA) has publicly opposed the bill, calling it “tone deaf” to the needs of small employers. Under the proposed expansion, employers with only 15 workers would be required to provide job-protected paid family leave, meaning they must hold a worker’s position open for up to 12 weeks. For a business with a small workforce, losing one employee for an extended period can remove a significant portion of capacity.

Employee Rights Groups Argue an Expansion the Law is Necessary

Supporters of the expansion argue that employees who contribute to the paid leave system and depend on the benefits should not be denied job protection just because they work for a smaller firm. They note that extending protections makes New Jersey’s laws more equitable and consistent across the workforce. However, the debate highlights a fundamental tension between expanding worker benefits and maintaining a business climate that can sustain small employers.

Contact Our New Jersey Employment Lawyer Today

At Poulos LoPiccolo PC, our New Jersey employment attorney has the professional experience that you can rely on when it matters most. If you have any questions about paid family leave in New Jersey, we are here to help. Contact us today to arrange your completely private, no strings attached initial case review. We handle family leave cases statewide in New Jersey.