On January 12, 2026, the enactment of Assembly Bill No. 3451 introduced a sweeping set of amendments to New Jersey’s employment statutes. These changes, which take effect July 17, 2026, not only bring smaller employers under the scope of the New Jersey Family Leave Act (NJFLA) but also fundamentally alter eligibility standards, how leave benefits are coordinated, and when job restoration is guaranteed.
The following overview details the critical pillars of this new law and the immediate impact on New Jersey workplaces.
NJFLA Expansion to Smaller Employers
The legislation dramatically broadens the reach of the NJFLA by lowering the employee threshold for compliance.
- Previous Standard. Previously, the NJFLA applied only to employers with 30 or more employees.
- New Requirement. The definition of a covered “employer” has been expanded to include any entity employing 15 or more employees. Employers with fewer than 15 employees will be subject to the law under a phased-in compliance schedule, with coverage extending to employers with five or more employees by 2028.
- Implications. This change extends job-protected family leave rights to a significant segment of the workforce previously exempt. Employers with 15 to 29 employees must now administer protected family leave and maintain health benefits during that leave, just as larger employers do.
Accelerated Employee Eligibility
Historically, NJFLA eligibility mirrored the federal Family and Medical Leave Act (FMLA) standards, requiring substantial tenure. The new law drastically reduces these metrics, making newer and part-time employees eligible for job-protected leave much sooner.
- The Old Rule. An employee must have been employed for at least 12 months and worked at least 1,000 base hours in the preceding 12 months.
- The New Rule. Effective July 17, 2026, an employee must be employed for at least 3 months and have worked at least 250 base hours during the preceding 12-month period.
- Impact. This change means an employee hired in January could be eligible for 12 weeks of job-protected family leave by April, provided they have worked roughly 20 hours a week.
Job Restoration Rights Linked to TDI and FLI Benefits
Perhaps the most profound shift is the explicit link established between state financial benefits and job security. Under the new law, the receipt of state wage replacement benefits, specifically Temporary Disability Insurance (TDI) or Family Leave Insurance (FLI), now triggers a statutory right to reinstatement.
- The New Requirement. An employee who receives TDI for their own disability or FLI benefits for family care is “entitled to be restored” to their previous position or an equivalent one upon their return. Notably, this change is distinct from the job restoration requirements under the NJFLA.
- Exception. Reinstatement is not required if the employee would have lost their position due to a genuine Reduction in Force (RIF) regardless of the leave.
Employee Control Over “Order of Operations”
The amendments no longer grant employers the ability to dictate the order in which paid time off is used and allows employees who are eligible for paid sick leave and either TDI or FLI to choose which type of leave or benefit to use first, provided that only one form of paid leave may be used at a time.
- Employee Choice. The law states that an employee eligible for both New Jersey Earned Sick Leave and state benefits (TDI/FLI) “shall have the option” to choose which to use.
- No Mandatory Exhaustion. Employers are prohibited from requiring employees to exhaust their accrued sick leave before accessing state disability or family leave funds.
- No “Double Dipping”. While employees have the choice, they may not receive multiple forms of full pay (such as full sick pay and full disability benefits) simultaneously for the same period. This specific provision makes it unclear whether employees can continue to supplement TDI or FLI benefits with sick, vacation, or other paid time off to receive 100 percent of their pay.
Posting and Notification Obligations
With the expansion of the law, a new wave of employers must now adhere to strict notification standards.
- Mandatory Posters. Employers with 15 or more employees must now display the official New Jersey Family Leave Act poster on or before the effective date in a prominent location at the worksite. They may also distribute it electronically to remote workers. Failure to post can result in fines.
- Written Guidance. Employers must ensure their written policies (handbooks) are updated and distributed to employees to clearly outline their rights under the expanded law.
- Anti-Retaliation. The law reinforces protections against retaliation. Employers cannot discharge, harass, or discriminate against an employee for requesting leave, filing for benefits, or exercising their new option to choose between sick pay and state benefits.
Next Steps for Employers
To ensure full compliance, New Jersey employers, especially those in the newly covered 15 to 29 employee range, should act before the effective date.
- Update Employee Handbooks: Revise policies to reflect the new 15-employee threshold as well as the updated eligibility requirements of 3 months tenure and 250 hours worked. Remove any language requiring the mandatory exhaustion of sick leave prior to state benefits.
- Display New Posters: Download and display the latest NJFLA and FLI/TDI posters immediately or provide electronic versions for remote workers.
- Train HR and Management: Ensure supervisors understand they cannot force an employee to use sick days if the employee prefers to file for state insurance benefits.
- Audit Insurance and Paid Time Off Coordination Policies: Review any policies that permit employees to use paid time off (such as sick leave, vacation, or PTO) to supplement TDI or FLI benefits. These policies should be evaluated in light of the new prohibition on receiving multiple forms of full pay for the same period. Until the New Jersey Department of Labor issues implementing regulations, the most conservative approach is to continue allowing employees to use paid time off to “top off” state benefits, while carefully ensuring that the combined payments do not exceed the employee’s normal weekly wages.
