Legal Updates

In a prior alert, we explained that on January 17, 2026, Governor Murphy signed into law amendments to the New Jersey Family Leave Act (NJFLA), significantly expanding employer coverage while also lowering employee eligibility thresholds. These changes, which will impact thousands of New Jersey employers, are now in effect (starting July 17, 2026).   

What Changed as of July 17, 2026?

The NJFLA amendments make three critical changes:

1. More employers covered: The threshold number of employees for the NJFLA to apply to an employer has dropped from 30 to 15 employees. The amendments also provide a phase-in schedule per which additional employers will be covered by the NJFLA in 2027 and 2028 as follows:

• • Effective July 17, 2027: Covers employers with 10+ employees in the preceding 12 months.
  • Effective July 17, 2028: Covers employers with 5+ employees in the preceding 12 months.

2. New hires are eligible sooner: An employee now only needs to be employed by the employer for at least 3 months to be covered by the NJFLA.

3. Service hour requirement adjusted: An employee only needs to be employed by the employer for at least 250 hours during the preceding 12 months.

What are the Newly Created Job Protection Rights for Employees Receiving NJFLI or TDI  Benefits? 

Amendments were also made to the New Jersey Family Leave Insurance (FLI) and Temporary Disability Insurance (TDI) law.  Previously, NJFLI and TDI were strictly wage-replacement benefit programs available to an employee while on an approved leave of absence and did not afford the employee any job protection right to reinstatement. As of today, that has changed.  Now, employees approved to receive FLI or TDI (state or private) benefits have a legal entitlement to reinstatement if their leave isn't already covered by the NJFLA or the federal Family and Medical Leave Act (FMLA). 

This is a significant development for all employers in New Jersey to be aware of and to ensure compliance with going forward. 

Employers were hopeful that the sweeping amendment to the FLI and TDI law would be revisited by the legislature and/or the New Jersey Department of Labor, Division of Temporary Disability and Family Leave Insurance Benefits (NJDOL) would issue clarifying guidance.  The NJDOL issued guidance on July 15, 2026, but it was not the favorable clarification that employers were hoping to obtain.   

• No Minimum Employer Size: Employees can utilize this job-protected leave regardless of how few people their company employs.
• No Work History Minimums: There are no length-of-employment or hour requirements necessary to qualify for job protection when receiving FLI or TDI benefits.
• Reinstatement Right: Upon returning from leave, employees are entitled to their same position or an equivalent job with comparable pay, benefits, and seniority.
• Employee Choice of Benefits: Employees who qualify for both paid sick leave under the NJ Earned Sick Leave Act and FLI or TDI have the right to choose which benefit to use and in what order. The company cannot require an employee to use these benefits simultaneously or dictate which one to use first.  Rather, the employer needs to provide information about the available options to the employee, and the employee would inform Human Resources which benefit(s) the employee desires to use and when.

What Employers Need to Do?

1. Update employee handbook: Employers with 15 or more employees must update their employee handbook to either incorporate a new policy addressing the NJFLA, or to amend an existing NJFLA policy to align with the new threshold requirements. [Employers with 50 or more employees – as to which the federal Family and Medical Leave Act applies – must also ensure their policies address the appropriate coordination of the NJFLA and the FMLA]. Leave of absence, NJFLI and TDI policies must be reviewed and updated to align with the amendments to the law.  
2. Review the FAQs posted by the NJDOL, specifically under the tab “TDI/FLI Job Protection.”
3. Revise your current compliance procedures:
   • Update eligibility tracking systems for the new NJFLA 3-month/250-hour thresholds;
   • Revise leave request forms and approval workflows;
   • Coordinate with payroll, benefits, and leave administrators; and
   • Train human resources and managers on the new thresholds under the NJFLA, and how to properly administer a leave of absence including non-retaliation and reinstatement obligations (including when the employee receives NJFLI or TDI benefits).

Need Help?

Our employment law practice group regularly assists employers with handbook updates, employee leave compliance, and practical training on how to administer leaves of absence.