LEGISLATIVE FISCAL ESTIMATE

[First Reprint]

SENATE, No. 2978

STATE OF NEW JERSEY

221st LEGISLATURE

 

DATED: JANUARY 7, 2025

 

 

SUMMARY

 

Synopsis:

Establishes protected leave under “Family Leave Act” and family temporary disability leave benefits for bereavement for death of child, miscarriage, stillbirth, and certain other circumstances.

Type of Impact:

Increase in annual State expenditures and revenue.

Agencies Affected:

Department of Labor and Workforce Development.

 

 

Office of Legislative Services Estimate

Annual Fiscal Impact

 

 

State Expenditure Increase

Indeterminate

 

State Revenue Increase

Indeterminate

 

 

 

 

·         The Office of Legislative Services (OLS) concludes that the bill will result in an indeterminate increase in annual State expenditures by permitting individuals to newly qualify for family temporary disability leave benefits due to certain events.  While the OLS is able to estimate the possible costs associated with certain provisions of the bill, it is unable to estimate how the Family Leave Insurance program will be affected in the aggregate by the proposed eligibility changes to determine the annual State expenditure increase.

·         The Family Leave Insurance program is funded entirely through an assessment on workers’ wages, the rate of which is set by the Department of Labor and Workforce Development annually to cover anticipated program expenditures and a reserve requirement.  By broadening the scope of who can qualify for benefits under the program, the bill will lead to an indeterminate increase in annual State revenues from higher assessed rates on workers’ wages, all else being equal.

BILL DESCRIPTION

 

      This bill expands the circumstances under which an employee may take family leave granted by the New Jersey Family Leave Act.  It allows an employee to take family temporary disability leave benefits granted by the Temporary Disability Benefits Law to bereave the loss of a child due to the death of the child, or miscarriage, stillbirth, or termination of a pregnancy for medical reasons, if the individual, or the spouse, domestic partner, or civil union partner of the individual, is a biological parent of the child or is a parent of the child pursuant to a valid gestational carrier agreement.  The bill also allows an employee to take family temporary disability leave benefits to bereave an unsuccessful adoption that had been pending and planned by the employee or to bereave an unsuccessful fertility treatment, including, but not limited to, intrauterine insemination and assisted reproductive technology.

      The bill limits leave and benefits for bereavement as follows:

      (1)  For bereavement related to a circumstance for which the employee would not otherwise be eligible for any other kind of disability and family leave and benefits, the employee may take leave and benefits, depending on the circumstances, for not more than 21 days immediately following the date of the event which is the reason for the bereavement.

      (2)  For bereavement related to a circumstance for which the employee would be otherwise eligible for leave and benefits, depending on the circumstances, the employee may take leave and benefits for not more than seven days immediately following the date of the event that is the reason for the bereavement. 

 

 

FISCAL ANALYSIS

 

EXECUTIVE BRANCH

 

      None received.

 

OFFICE OF LEGISLATIVE SERVICES

 

      The OLS concludes that the bill will result in an indeterminate increase in annual State expenditures by permitting individuals to newly qualify for family temporary disability leave benefits due to certain events.  While the OLS is able to estimate the possible costs associated with certain provisions of the bill, it is unable to estimate how the Family Leave Insurance program will be affected in the aggregate by the proposed eligibility changes to determine the annual State expenditure increase.  For example, the Department of Labor and Workforce Development’s combined annual activity reports for the Family Leave Insurance and Temporary Disability Insurance programs show that between 2018 and 2022 there were on average 145 claims annually under the Family Leave Insurance program for bonding with an adopted child.  The National Council for Adoption reports that the unsuccessful adoption rate is approximately 20 percent.  Based on this, it can be estimated that about 40 unsuccessful adoptions occur each year in New Jersey.  If two individuals affected by the unsuccessful adoption each claimed the weekly maximum benefit for 2024 of $1,055 for the maximum of 21 days, State expenditures would increase by about $253,000. 

      The OLS, however, cannot reliably estimate the frequency of the other events covered by the bill to evaluate their collective impact on annual State expenditures.  Moreover, some individuals that would otherwise be eligible for benefits under this bill may be entitled to other employer-provided disability and family leave benefits.  This would reduce the need for the benefits provided under this bill and lessen the State’s associated costs.

      The Family Leave Insurance program is funded entirely through an assessment on workers’ wages, the rate of which is set by the Department of Labor and Workforce Development annually to cover anticipated program expenditures and a reserve requirement.  By broadening the scope of who can qualify for benefits under the program, the bill will also lead to an indeterminate increase in annual State revenues from higher assessed rates on workers’ wages, all else being equal.

 

Section:

Commerce, Labor and Industry

Analyst:

John Gaudioso

Assistant Fiscal Analyst

Approved:

Thomas Koenig

Legislative Budget and Finance Officer

 

This legislative fiscal estimate has been produced by the Office of Legislative Services due to the failure of the Executive Branch to respond to our request for a fiscal note.

 

This fiscal estimate has been prepared pursuant to P.L.1980, c.67 (C.52:13B-6 et seq.).