Jim Jantz, JD
Director of Compliance – Absence, Disability, & Life
For years, New Jersey leave law has operated with a split that leave administrators know well: the New Jersey Family Leave Act (NJ FLA) handled job protection, while Temporary Disability Insurance (TDI) and Family Leave Insurance (FLI) handled the paycheck. An employee could collect wage replacement through TDI or FLI and still have no statutory guarantee that their job would be there when they returned, unless they also happened to qualify under the NJ FLA or another protected leave law.
Assembly Bill A3451, signed by Governor Murphy in January 2026 and taking effect July 17, 2026, makes a meaningful change to that dynamic. And while the headlines often focus on the expanded employer coverage threshold, the more consequential development may be what happens on the paid leave side.
The NJ FLA gets a wider net.
The threshold for NJ FLA coverage drops from 30 employees to 15 on July 17, 2026, with further reductions in 2027 and 2028. The employee eligibility requirements ease at the same time, moving from 12 months of employment and 1,000 hours worked to 3 months and 250 hours. Employers that haven't had to administer NJ FLA leave before will need to build that process from the ground up, including policies, notices, training, and reinstatement protocols, before the effective date.
The bigger shift: job protection (potentially) comes to TDI and FLI
This is the part of A3451 that has the broadest reach. New Jersey's TDI and FLI programs cover wage replacement when an employee is out for their own serious health condition or for qualifying family care reasons. With limited exception, they haven’t included a reinstatement requirement. That seems to change under A3451.
The amendment includes language that employees receiving TDI or FLI benefits will now be entitled to return to the same position they held before their leave, or to an equivalent position with the same seniority, status, pay, and benefits. But, it’s worth noting that the current FLA has language, which is not removed or eliminated by the amendment, that indicates FLA does not increase or modify any entitlement under the “Family Leave Act.”
If we assume the amendment will be interpreted to create job protection, employees no longer need to satisfy NJ FLA or Family and Medical Leave Act (FMLA) eligibility requirements to have job protection during a TDI or FLI absence, and they may be entitled to significantly longer periods of job protected absence than is available under FLA, which currently allows 12 weeks in a 24-month period. For employers managing leave across multiple states, this is worth noting — New Jersey is part of a broader trend of states working to close the gap between what their paid leave programs promise and what employees can actually count on when they return to work.
Sick leave sequencing shifts to employee choice
A3451 also gives employees the ability to choose whether to use earned sick leave or TDI/FLI first, and in what order. Previously, employers often had more control over how these ran together. One limit remains: employees cannot receive more than one type of paid leave at the same time, so sick leave cannot be used to supplement TDI or FLI and bring take-home pay to 100%.
What to do before July 17
- Review leave policies for NJ FLA coverage and eligibility under the new thresholds
- Review your reinstatement requirements related to TDI and FLI-related procedures as applicable, and look out for additional guidance from the state
- Update employee communications to reflect the new coordination rules for sick leave and TDI/FLI
- Watch for updated state posters and revised guidance as the effective date approaches
- Train HR and managers on both the expanded protections and the new employee rights around leave sequencing
The state has indicated further guidance is coming. Employers who start the policy review now will be better positioned to respond when it arrives.
For a closer look at how A3451 and other state statutory changes may affect your organization, visit the Marsh McLennan Agency Statutory Updates.
