Employees in New Jersey will be pleasantly surprised when their contribution rates to the New Jersey Temporary Disability Insurance (TDI) program decrease to $0 for 2023. Employees will also see a significant decrease in their contribution rates for the New Jersey Family Leave Insurance (FLI) program for 2023.
|
New Jersey Temporary Disability Insurance (TDI) |
|||||
|
Year |
Maximum Benefit Amount |
Employer Contribution Rate |
Employee Contribution Rate |
Maximum Employee Contribution |
Maximum Taxable Wage Base |
|
2021 |
$903 |
0.5% on the first $36,200 earned by each employee during the calendar year |
0.47% |
$649.54 |
$138,200 |
|
2022 |
$993 |
0.5% on the first $39,800 earned by each employee during the calendar year |
0.14% |
$212.66 |
$151,900 |
|
2023 |
$1,025 |
0.5% on the first $41,100 earned by each employee during the calendar year |
0% |
$0.00 |
$156,800 |
|
New Jersey Family Leave Insurance (FLI) |
|||||
|
Year |
Maximum Benefit Amount |
Employer Contribution Rate |
Employee Contribution Rate |
Maximum Employee Contribution |
Maximum Taxable Wage Base |
|
2021 |
$903 |
0% |
0.28% |
$386.96 |
$138,200 |
|
2022 |
$993 |
0% |
0.14% |
$212.66 |
$151,900 |
|
2023 |
$1,025 |
0% |
0.06% |
$94.08 |
$156,800 |
NJ TDI
TDI provides income replacement cash benefits for up to 26 weeks to employees who cannot work due to pregnancy, childbirth recovery, COVID-19, or a serious health condition unrelated to their job. While both employers and employees have historically contributed to TDI coverage, employees will not contribute to TDI in 2023.
NJ FLI
FLI provides income replacement cash benefits for workers up to 12 weeks to bond with a new child, care for a family member, or address matters relating to being a victim of domestic or sexual violence. NJ FLI is funded completely by employee payroll deductions. For 2023, employees will also benefit from a significant decrease in their NJ FLI payroll deductions from the current rate of 0.14% of the first $151,900 in wages to 0.06% of the first $156,800 in wages for 2023.
TDI and FLI claimants are paid 85% of their average weekly wage, up to the maximum weekly benefit rate set for that calendar year, which is $1,025 for 2023.
According to the New Jersey Department of Labor & Workforce Development, TDI and FLI contribution rates have been declining over the past three years largely due to increasing fund balances. A 2019 state law increased the level of wages subject to wage taxes effective January 1, 2020, for NJ workers under both programs to offset these benefit increases. Additionally, pandemic-related unemployment insurance programs resulted in a decrease in TDI and FLI claims, further bolstering the growing TDI and FLI fund balances.
Private Plans
Employers may participate in the state’s TDI plan or choose a private plan offered by an insurance company, as long as the benefits, contribution, and eligibility requirements for the TDI private plan are equal or more generous than the state plan.
For the first time in 2023, employers with NJ employers will be able to choose a private plan for FLI as insurance carriers are now offering an FLI private plan option. As with TDI, an FLI private plan must offer the same or more generous benefits, contribution, and eligibility requirements as the state plan. Private plans offered through an insurance carrier for TDI and FLI can provide employers with flexibility and ease for claims administration as well as seamless integration with existing short-term disability and long-term disability policies.
Employers with New Jersey employees are advised to confirm with their payroll providers that the TDI and FLI contribution rates and maximum taxable wage base amounts are updated in their payroll systems for January 1, 2023.
For those employers who wish to opt out of the FLI state plan with a private plan, Risk Strategies’ team of experienced professionals is here to help. Contact us today.
Risk Strategies is committed to keeping employers informed and up-to-date. Reach out to your Risk Strategies representative with questions or contact us at benefits@risk-strategies.com.