NJDOL Issues New Guidance Claiming Employees Who Receive TDI and FLI Benefits Are Entitled to Job Protection Even When Not Eligible For FMLA or NJFLA Leave

Executive Summary

We write to update New Jersey employers on changes to New Jersey’s Family Leave Act (NJFLA) and Temporary Disability Insurance Law (TDI) as the New Jersey Department of Labor and Workforce Development (NJDOL) clarified in recent published guidance. If courts interpret the guidance as dispositive, these changes significantly expand the rights of New Jersey employees and impose new requirements on employers.

According to recently issued guidance by the NJDOL, New Jersey employees who receive TDI benefits or family leave insurance benefits (FLI) are entitled to be reinstated to their jobs when their leave expires, even if they do not qualify in the first place for a protected leave of absence under the NJFLA or the federal Family and Medical Leave Act (FMLA). According to the NJDOL website, there are no minimum employer size requirements or work history requirements for this protection. This alert summarizes the new guidance, explains its practical implications, and identifies key areas of ongoing uncertainty.

Background: TDI and FLI as Monetary Benefits

Since the NJFLA was passed in 1990, eligible employees have been permitted to take up to 12 weeks of protected leave to care for the serious health condition of a parent, spouse, or child or to care for a new baby. For many years, that time off was unpaid. Since 2009, New Jersey has also allowed eligible employees to receive partial wage compensation in the form of FLI benefits during their NJFLA absence. Unlike the FMLA, the NJFLA was not intended to address time off for an employee’s own serious medical condition. The NJFLA’s legislative history and case law interpreting the NJFLA for the past 36 years makes clear the NJFLA does not address time off for an employee’s own serious medical condition or the employee’s receipt of benefits such as TDI. For the employee’s own serious medical condition, the employee could take a leave of absence under the FMLA and apply for TDI from the state or a private disability plan to receive partial wage compensation for up to 26 weeks; however, the actual time off was not automatically protected under New Jersey state law.

The 2026 Amendment and New NJDOL Guidance

On Jan. 17, 2026, then-Gov. Phil Murphy signed P.L. 2025, Chapter 279 (Assembly Bill 3451), which expanded employee rights, effective July 17, in a couple of ways.

First, among other changes, the law amended the NJFLA to require employers with 15 or more employees to offer job protection to eligible employees and to protect employees after just three months of employment and 250 hours of service.

But a second provision contained in a seemingly inconspicuous sentence in the law (and now emphasized on the NJDOL’s website) also pronounced that anyone collecting TDI (for up to 26 weeks) and/or FLI (for up to 12 weeks) is entitled to job reinstatement. While no federal or state law previously required automatic reinstatement for an employee simply because the employee was collecting TDI or FLI benefits, the new law does. In fact, based on the plain language of the new law, if an employee were disabled for their own medical condition and collected TDI for 26 weeks and then sought time off to care for a family member and collect FLI for another 12 weeks, the employee could, in theory, take 38 weeks of protected leave in a one-year period – even if the employee were not eligible for leave under the FMLA or NJFLA in the first place!

Other Key Points From the NJDOL Guidance

The NJDOL’s FAQ guidance establishes the following:

• Stand-Alone Reinstatement Right. According to the NJDOL, an employee’s receipt of TDI or FLI benefits creates a reinstatement right that is independent of, and in addition to, any protection under the NJFLA or FMLA.
• No Employer Size or Work History Requirements. The NJDOL prominently stated on its website: “There are no minimum employer size requirements or work history requirements.” Employees need only meet the earnings requirements for TDI or FLI benefits (work 20 weeks earning at least $310 per week or earn a combined total of $15,500 in the base year).
• Applies to Own Medical Condition. The protection applies to TDI for the employee’s own health condition (up to 26 weeks) – not just family leave situations. This effectively creates leave protection that is more than twice as long as FMLA (12 weeks).
• Presumption of Eligibility. According to the NJDOL, employers must assume that an employee is eligible for job protection while the employee’s TDI or FLI application is pending, until a determination has been made otherwise.
  
  

Interpretive Tension and Ongoing Debate

At this juncture, it is unclear how far this new protection extends. Despite these express statements, Assembly Bill 3451 also states that it should not be interpreted as changing rights under the NJFLA.¹ This statement conflicts with the NJDOL’s premise that receiving TDI or FLI benefits alone creates a separate job-protection right, regardless of employer size or employee tenure.

The NJDOL’s guidance goes further than many expected, especially because the same legislation specifically changed the eligibility and employer-coverage requirements for the NJFLA. The NJFLA amendment would be superfluous if an employee’s receipt of TDI or FLI alone could guarantee the employee job reinstatement.

Conclusion

The NJDOL’s guidance has significant practical implications for employers of all sizes. Smaller businesses in particular may face operational challenges, as they may need to hold an employee’s position open for up to six months or longer while an employee receives TDI and/or FLI benefits. We will closely monitor this issue and await additional guidance and formal regulations from the NJDOL. Until the NJDOL issues further clarification, the conservative approach for New Jersey employers is to assume that an employee’s job may be protected for the entire time the employee remains eligible for and receives TDI or FLI benefits.

Employers may wish to review and update leave policies, train HR personnel and managers on the new requirements, and monitor the NJDOL’s website for additional guidance and formal rulemaking. If you have any questions or would like more information on the legal developments discussed above, please contact a member of Lowenstein Sandler’s Executive Compensation, Employment, and Benefits group.

¹ The relevant provision states: Any covered individual who took any temporary disability benefits pursuant to P.L.1948, c.110 (C.43:21-25 et al.), or family temporary disability leave benefits pursuant to P.L.2008, c.17 (C.43:21-39.1 et al.), shall, upon the expiration of the leave, be entitled to be restored by the employer to the position held by the employee when the leave commenced or to an equivalent position of like seniority, status, employment benefits, pay, and other terms and conditions of employment, except that nothing in this section or any section of P.L.2008, c.17 (C.43:21-39.1 et al.) shall be construed as increasing, reducing, or otherwise modifying any entitlement provided to a worker by the provisions of the “Family Leave Act,” P.L.1989, c.261 (C.34:11B-1 et seq.) to be restored to employment by the employer after a period of family temporary disability leave. The employee shall retain all rights under any applicable layoff and recall system, including a system under a collective bargaining agreement, as if the employee had not taken the leave.