Most Employers Prepared for Family Leave Insurance but Many Small Firms Are Still in the Dark

Jun 2009

With a television crew in tow, John Sarno and Becky Dent of the Employers Association of New Jersey (EANJ) have conducted 12 seminars around New Jersey beginning in 2008, when the legislature enacted the family leave insurance program, which becomes effective on July 1st. They have spoken to hundreds of employers and EANJ has sent out a dozen emails explaining the law.  Sarno has even blogged on the topic, but he is frustrated with what he says is widespread misinformation about the program, particularly by small businesses.
 
After an evening presentation in East Rutherford at the annual meeting of the Gasoline Retailers Association, Sarno was convinced that a campaign launched to defeat passage of the insurance law has left small business owners misinformed and unprepared.
 
“During the debate around the bill, both proponents and opponents felt that it would be more emotional to call the insurance program ‘paid family leave.’  Some blatantly called the insurance law a ‘leave mandate.’  That mischaracterization has apparently stuck,” he says.

“The retailers were up in arms.  Some mocked the program as social engineering.  Others were angry about a tax increase, even though it is 100% funded by employee contributions,” Sarno says.

In reality, family leave insurance extends state-mandated temporary disability insurance (TDI) to provide insurance benefits for up to six weeks for workers caring for ill family members, newborns and newly adopted children.  Like TDI, family leave insurance would apply to all employers, regardless of size.

However, the insurance program does not require employers to grant a leave of absence or to keep a job open with a right to guaranteed reinstatement.

Despite requiring every employer in the state to participate in the insurance program, Sarno wondered why so few small businesses attended the EANJ seminars.  He got his answer when a small employer posted a message on EANJ’s blog.

“Basically the person said that they went to the New Jersey Department of Labor website for information on the ‘New Jersey Leave Law.’  The state’s family leave law applies to employers with 50 or more employees but that has nothing to do with family leave insurance, which applies to every employer, regardless of size. The person was totally confused and I think that many small businesses are simply in the dark,” says Sarno.

Sarno says that the insurance program gets complicated for employers that must administer the state family leave law and the federal family and medical leave law.  He also says that employers must be careful not to discriminate against workers who have caregiving or child care responsibilities at home.
 
Because of fair employment standards, employers typically do not terminate employment unless there is good cause to do so. This is not expected to change, says Sarno.

EANJ anticipates that small businesses will be faced with many more requests for time off after July 1st.  The insurance program requires additional posting, notice, and reporting procedures. “Will it be a hassle?” asks Sarno. “You bet.”

Just don’t call it a leave law.
 
For a comprehensive overview of 2008-2009 and what is on the horizon for employers, attend EANJ’s June 19th Annual Meeting. Click Here for details.