Paid family leave is working well in New Jersey

From Press of Atlantic City:

Taxes are going down in New Jersey.

At least one of them.

In 2011, the amount workers must contribute to the state’s Family Leave Insurance program will be cut from 0.12 percent of taxable wages to 0.06 percent. That means the current maximum contribution of $35.64 a year will drop to $17.76.

OK, so it’s only a $17 tax cut. But every little bit helps. And as state Labor Commissioner Harold J. Wirth noted, that $17 per worker comes to $57 million that will now go back into the economy rather than to Trenton.

And $57 million is nothing to scoff it.

The cut is important for another reason, too: It means the paid family-leave program is not turning into the out-of-control boondoggle that opponents feared.

The cut in the payroll tax is possible because the family-leave fund has grown to $50 million. Since the program was launched in July 2009, $83 million in benefits has been paid to more than 37,600 people, according to the state Department of Labor.

The paid family-leave law allows workers to take up to six weeks off to care for a new child or a sick family member. Workers are entitled to two-thirds of their salaries up to a maximum of $561 a week. Employers pay nothing for the program.

One of the unanswered questions surrounding the controversial program, which was pushed by former Gov. Jon S. Corzine, was how many workers would take advantage of the program and whether the funding mechanism was adequate.

As it turns out, the number of applications has run slightly below state projections of 30,000 to 40,000 per year, and the payroll tax has apparently proved more than adequate, hence the $17 a year tax cut.

Nor have we heard widespread screams of protest from employers, who feared the program would cause havoc with workloads and employee scheduling (although the deep recession probably helped mitigate that particular problem).

So New Jersey residents, who love to complain about Trenton, should note that they now have a workable, effective program that gives them some relief from the stress, financial and otherwise, that a new child or a sick family member can cause in a household. And the program, only the second paid family-leave program in the nation, is costing less than expected. How about that?

And there’s this: On Election Day, New Jersey voters approved a constitutional amendment prohibiting state government from raiding funds like the $50 million currently set aside for paid family leave. So the money should be safe – yet another novelty for the state of New Jersey.

This entry was posted in In The News, Paid Family Leave and tagged on by .

About waworkfam

The Washington Work and Family Coalition includes representatives of seniors, women, labor, health professionals, children’s advocates, faith communities, low income workers, employers, non-profits and other organizations. We’re working together to make it easier for parents to raise healthy children and care for aging parents; for workers to care for themselves or their partners in the event of a serious illness; and for businesses to offer modern workplace standards that improve productivity and worker health.

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