New Jersey Employee Related Updates: Payroll, Leave, Retirement Plan Regulations, and More
There have been many changes to the New Jersey workforce in recent times. The following are some of the major updates concerning various payroll, leave and retirement plan regulations in New Jersey, as well as the Federal W-4 form.
Minimum Wage Changes
The New Jersey minimum wage increased effective July 1, 2019 as follows:
- Regular wage: $10.00
- Seasonal wage: $8.85 This also applies to small employers (under 5 employees)
- Tipped workers: $2.63
Future increases will occur each January 1 until 2024 when the regular wage will hit $15.00.
Leave and Benefit Changes
NJ Family Leave Act changes effective June 30, 2019:
- Reduction in the number of employees for the employer to be subject to this act from 50 to 30 employees.
- The definition of a family member and child is expanded to include siblings, parent-in-law, grandparent, grandchild, other individual related by blood, and any individual the employee shows to have a close association with the employee.
- No longer a requirement of employer’s approval for intermittent leave upon birth, adoption, or foster care placement.
- Employees can take leave on a reduced schedule for a maximum of 12 consecutive months rather than 24 weeks.
- Reduction from 30 days to 15 days for advance notice for intermittent leave, although it remains at 30 days for continuous leave.
NJ Temporary Disabilities Benefits Law:
- This benefit provides partial wage replacement for injury, disabilities, bonding with a child, or care for a serious illness, injury, or health condition of a family member.
- The definition of a family member has been expanded to include siblings, parent-in-law, grandparent, grandchild, other individual related by blood, and any individual the employee shows to have a close association with the employee.
- The employee can elect to use PTO or other paid benefits. Previously the employer could require the use of PTO.
- An anti-retaliation provision has been added.
- The employee must be reinstated after the leave.
- The employee is prohibited from receiving disability, family leave benefits, or PTO at full salary at the same time.
- Effective July 1, 2020, paid leave will increase from six weeks to 12 weeks.
Security and Financial Empowerment Act:
- This currently provides up to 20 days of unpaid leave for employees who are victims of domestic violence or assault or have a family member who is a victim.
- The definition of a family member is expanded to include siblings, parent-in-law, grandparent, grandchild, other individual related by blood, and any individual the employee shows to have a close association with the employee.
- Employees can apply for monetary benefits under Family Leave or elect to use PTO effective July 1, 2020.
NJ Secure Choice Savings Program:
- This is designed to help workers whose employer does not provide a defined contribution retirement plan.
- It creates a state administered individual retirement account.
- This is separate from the NJ Pension Fund.
- It requires employers with 25 or more employees to participate.
- Employers with fewer that 25 employees may choose to participate.
- Workers can:
- Select a contribution level
- Opt out
- Do nothing and have a default rate of 3%
- This is effective by 2020.
- A draft of the new “Employee’s Withholding Allowance Certificate” W-4 was released on May 31, 2019.
- The IRS expects to release the final version in November.
- The employee has the option to use either the old or the new form W-4.
- The amount paid to an employee is not the amount used to calculate the withholding.
- The new form requires the employee to do numerous calculations to determine taxable pay, other income, deductions, exemptions, etc. to calculate withholding.
- The expectation is that employees will continue to use the old W-4 form which will result in excess withholding since the IRS has not revised the old tables to reflect the new tax law.
- The IRS has created a Withholding Calculator which can be found on the irs.gov website.
As additional employee related issues change, we will keep you informed. If you need additional information, please contact Alan S. Isaacs, CPA, MBA at [email protected].