By Sharon Lerner and Eileen Appelbaum, Center for Economic and Policy Research and Demos

This study examines New Jersey employers’ experiences with employees who need time off to care for a seriously ill child or family member or to bond with a new baby since 2009, when the state began offering paid family leave through the statewide Family Leave Insurance (FLI) program. This program builds on the state’s Temporary Disability Insurance (TDI) Program, which has been in place since 1948 and has covered maternity leave since 1970. Since 2009, New Jersey has provided benefits for more than 100,000 FLI leaves, the vast majority of which were used for the care of new babies. This study examines how this relatively new, statewide program has affected employers’ processes for administering and managing employee leaves. Does the program generate excessive paperwork, for instance, or burden employers in other ways? Is the program being abused, as some initially feared? And how, if at all, has it helped employers?

Based on 18 in-depth interviews with employers in a variety of industries throughout New Jersey, the study concludes that the paid family leave law has had little impact on how employers do business. Though those who consented to the interviews may not be representative of all employers in the state, their feedback provides insight into the programmatic and logistical details of this relatively new work and family program. The interviews yielded specific details about how FLI is used; how it is combined with other public and private programs; and how it has changed the experience of business owners and managers whose employees need time off to deal with family responsibilities.

The research is based on interviews with a cross-section of employers in diverse industries throughout New Jersey. The employers ranged in size from 26 to 36,000 employees and had at least one person take time off during the previous year to care for a seriously ill relative or new baby. Participants were promised confidentiality. Because New Jersey is only the second state to institute paid family leave, the experiences of its employers can provide critical insight for other states considering similar laws.

The study found that:

• None of the participating employers reported that the Family Leave Insurance program affected their productivity or turnover.
•  Only two of 18 employers felt the program negatively affected their profitability.
• Some participants found that the program improved employees’ morale.
• Several employers reported that the length of time employees were home to care for a new baby was longer than before the Family Leave Insurance program was in place.
• A majority of employers experienced no increase in paperwork due to administration of the program; some employers, however, reported a small to moderate increase.
• Despite fears that the program would be abused, no employers were aware of any instances of abuse.
• Men at the workplaces we studied took fewer family and medical leaves than women and the leaves they did take tended to be shorter.
• Some business owners and human resources (HR) managers reported a lack of awareness of FLI among their employees.
• More than four years after the program went into effect, even some human resources professionals were confused about or unaware of the provisions of the FLI program.
• Lastly, employers had several insights about how to improve the administration of the Family Leave Insurance program.

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