Maria starts a new job on Monday. Three weeks later, she suffers a stroke. Her doctor says she will need six months to recover. Her employer, a 15-person accounting firm, has never dealt with anything like this.
Right now, the employer’s path is reasonably clear. The company would weigh whether keeping her position open is feasible and make a business decision. Difficult, but manageable.
Under legislation taking effect July 17, that analysis changes entirely. Maria is now legally entitled to reinstatement for up to 26 weeks, simply because she is collecting Temporary Disability Insurance benefits while she recovers. Her tenure doesn’t matter. The size of her employer does not matter. There is no undue hardship provision that would allow the firm to permanently replace her.
The legislation was sold as a straightforward expansion of the New Jersey Family Leave Act (NJFLA), the state law that provides eligible employees up to 12 weeks of unpaid, job-protected leave for qualifying family reasons, such as bonding with a new child or caring for a seriously ill family member. Under those amendments, coverage expands to employers with as few as 15 employees, eligibility kicks in after just three months and 250 hours worked, and an estimated 400,000 additional workers gain access to job-protected leave.
Those are significant changes. But they are not the most significant changes in this legislation. Tucked into the same bill are amendments to an entirely different set of laws, the Temporary Disability Insurance (TDI) and Family Leave Insurance (FLI) statutes, that have received far less attention.
What TDI and FLI Actually Are
TDI and FLI are state-run mandated insurance programs. When Maria can’t work because of her stroke, TDI pays her a portion of her salary for up to 26 weeks. FLI does something similar when an employee needs time off for qualifying family reasons, such as caring for a sick parent. Premiums are collected through payroll deductions, and when a qualifying claim is
filed, benefits flow directly between the employee and the state. Critically, both programs apply, with limited exception, to most employers in the state and neither program has ever required an employer to hold a job open for an employee’s return.
The new amendments, now codified at P.L.2025, c.279, change that by amending the TDI and FLI statutes directly, providing that any employee collecting those benefits “shall…be entitled to be restored by the employer to the position held by the employee when the leave commenced or to an equivalent position of like seniority, status, employment benefits, pay, and other terms and conditions of employment.” Then, in the same provision, the legislature added that nothing in these amendments “shall be construed as increasing, reducing or otherwise modifying any entitlement” under the NJFLA. That disclaimer does little to clarify what employers are now dealing with. TDI and NJFLA operate in entirely separate lanes. TDI is wage replacement for an employee’s own disability. NJFLA provides job protection when an employee needs to care for a family member. They do not intersect.
Maria could walk through the door on day one of her new employment, already eligible for TDI benefits, because eligibility is determined based on her earnings from all covered employers in her base year, not just with the current employer. For Maria’s employer, that could mean leaving a critical role unfilled for up to six months, for an employee who has been on the job all of three weeks.
A Right Without Precedent
New Jersey is one of only five states, plus Puerto Rico, that mandate TDI benefits. Of those, no other provides job protection alongside wage replacement. TDI has always been a wage replacement program, full stop. Job protection has historically been the province of leave laws like the federal Family Medical Leave Act (FMLA) or comparable state laws, which come with eligibility thresholds, employer size minimums, and defined ceilings on duration.
This amendment blows past all of that. It creates a standalone reinstatement right lasting up to 26 weeks, over twice what the FMLA provides, with none of the FMLA’s structural limits. And unlike the interactive process framework under the Americans with Disabilities Act (ADA) and New Jersey Law Against Discrimination (NJLAD), this new amendment does not provide an undue hardship exception, even for small employers.
The impact will fall hardest on small businesses, and New Jersey has no shortage of them. Of the 330,192 private sector establishments in New Jersey, 96% employ fewer than 50 workers and nearly 70% of those have five or fewer employees. For a five-person shop, a six-month, no-hardship reinstatement obligation is not an administrative inconvenience. It is an existential operational problem. But large employers are not insulated either. They have long understood TDI as a wage replacement program with no job protection component. That understanding is no longer accurate.
A change of this magnitude demands that the employers who will bear the cost of it have a voice. EANJ is prepared to bring these employers and their concerns to the table so legislators can hear directly what this obligation looks like on the ground. The question is whether anyone in Trenton is prepared to listen before July 17.
About EANJ
The Employers Association of New Jersey is a nonprofit employers association providing education, guidance, and support on employment law compliance and human resource best practices. EANJ serves employers across industries with a focus on practical, actionable solutions.