Official Site of The State of New Jersey

The State of NJ site may contain optional links, information, services and/or content from other websites operated by third parties that are provided as a convenience, such as Google™ Translate. Google™ Translate is an online service for which the user pays nothing to obtain a purported language translation. The user is on notice that neither the State of NJ site nor its operators review any of the services, information and/or content from anything that may be linked to the State of NJ site for any reason. -Read Full Disclaimer close

Division of Temporary Disability and Family Leave Insurance

Your year-end statement shows tax information for your employees who collected Temporary Disability benefits in 2023.

TDI - There will continue to be no Temporary Disability employee contribution deductions for the 2024 calendar year.

FLI - Employees will contribute 0.09% of the first $161,400 in covered wages. The maximum FLI worker contribution for 2024 is $145.26.

• Temporary Disability Insurance
• Family Leave Insurance
• Private Plan Information

About the Program

NJ Temporary Disability Insurance provides cash benefits to employees in New Jersey who are unable to work due to a physical or mental health condition or other disability unrelated to their work, including pregnancy/childbirth recovery. Click here to download a printable handout about the program.

Temporary Disability Insurance is a wage replacement program and it does not provide job protection. However, during the period in which an employee receives these benefits, their job may be protected under federal law. In addition, if an employer retaliates against an employee for taking or seeking to take Temporary Disability Insurance benefits, they have the right to take private legal action. Learn more about job protection here.

Covered Employees and Employers

Employers must participate in these State public insurance programs and deduct payroll taxes for employees working in NJ, or employers may choose to provide employees coverage through a private insurance plan that meets NJ requirements. The federal government is exempt. Temporary Disability Insurance is optional for local governments (for example, counties, municipalities, and school districts). Generally, employees that work a significant amount of time outside of NJ are not covered, but should still apply to find out if they are eligible.

The Employer's Role

Employers are not required to complete an “employer portion” of the application.

Employers still must:

• Display Temporary Disability and Family Leave Insurance posters in a workplace location clearly visible to employees
• Provide written notice of Temporary Disability Insurance when an employee is hired, requests information, or notifies an employer of their need for leave
• Report employee’s quarterly earnings to the state. We will use those reported earnings to qualify a claim and establish a weekly benefit amount
• Closely monitor all benefits issued to your employees and notify the Division immediately if benefits are being issued incorrectly
• Report the taxable portion of Temporary Disability benefits on your employee's W-2 for the preceding calendar year.

Employers can also help their employees understand these programs by providing information - see our employer toolkit.

Paid Time Off and Temporary Disability Insurance

Employers may be able to require employees to take paid time off (PTO) before Temporary Disability benefits. It depends on how they meet the requirements of the NJ Earned Sick Leave law. This law requires employers of all sizes to provide full-time, part-time, and temporary employees with up to 40 hours of paid sick time per year so they can care for themselves or a loved one.

Employers who separate NJ Earned Sick Leave from their PTO policy can require employees to take PTO before claiming Temporary Disability Insurance benefits. Employers cannot require them to take time accrued under the NJ Earned Sick Leave law.

Some employers use their PTO policy to follow the NJ Earned Sick Leave law. In this case, the employer may not require an employee to utilize any of their PTO prior to Temporary Disability benefits.

See below for more information on employees of the State of New Jersey and other entities covered as state employers.

Find your scenario below to learn more:

Scenario 1: The employer has an Earned Sick Leave policy in compliance with the law, and a separate paid time off (PTO) policy.

Employees can be required to use PTO before receiving Temporary Disability benefits, but not time accrued under the Earned Sick Leave law.

Scenario 2: The employer groups NJ Earned Sick Leave with their paid time off (PTO) policy.

In this case, all days in the PTO policy must meet the requirements of the Earned Sick Leave law. Employees can’t be required to use any PTO before receiving Temporary Disability benefits. This includes PTO policies that provide more than 40 hours of paid time off.

Scenario 3: The employer only has NJ Earned Sick Leave that is compliant with the law.

Employees can’t be required to use any NJ Earned Sick Leave before receiving Temporary Disability benefits.

Scenario 4: Employees of the State of NJ.

The State of NJ may require employees of the State of New Jersey (including Rutgers, New Jersey Institute of Technology, and other entities who are covered as state employers) to use only up to two weeks of accrued sick time before receiving Temporary Disability Insurance benefits, although the State of NJ may not require state employees to use their last week of sick time before receiving Temporary Disability Insurance benefits.

Keep in mind, any day that an employee receives full wages in paid time off (or NJ Earned Sick Leave), they cannot also receive Temporary Disability benefits. This means that if an employee utilizes employer paid time off or NJ Earned Sick Leave first, it will postpone Temporary Disability eligibility, and may reduce the length of time an employee receives Temporary Disability benefits.

Temporary Disability provides up to 85% of an employee’s average weekly wage, while under the NJ Earned Sick Leave law, employers must pay sick time at the regular rate of pay. Learn more about how employees are paid for earned sick leave here.

What We Need From the Employee

Employees who are unable to work due to an injury, illness, or scheduled surgery should complete the first two sections of the application (Parts A & B.) They must include:

• The last day they physically worked
• The first day they were unable to work, and under the care of a health care provider
• All employment from the past 18 months, with accurate dates and work locations
• Dates of any paid time off or other benefits received after the last day they worked

What We Need From You

Since the work history and wages are based solely on your employee's statement and wage record, we need you to oversee this process and assist your employees as needed. You can do this by paying close attention to the "The Notice of Disability Benefits Charged or Credited" form (DS7-C). You will receive this notice each time State Disability Insurance benefit payments are made to your employee(s). The notice is mailed to you on the same day that the employee’s payment posts.

This means we will rely on you to check the time frame we issued benefits and compare it to when they worked or received paid time off. Any incorrect payments should be reported to the Division immediately by calling our customer service center at (609) 292-7060 or by faxing a corrected statement (along with the employee's Social Security number) to (609) 984-4138.

We suggest keeping a separate file on each employee receiving Temporary Disability Insurance benefits, and adding the DS-7C received from each benefit payment to it. This way you can keep track of the charges per employee for the life of the claim.

We May Request Additional Information From You

In the event that we do not have enough information to approve a claim based on the reported calendar earnings and the employee's statement, you may be required to provide information. In these cases, you may receive in the mail a request for information (form E-10) or request for additional wage information (form E-20). The wage and employment information you provide is required to determine their claim, so please complete and return this form promptly. Failure to do so can result in a denial of benefits and a monetary penalty.

Information that we may request from an employer can include:

• Federal employment identification numbers
• Paid time off, vacation, or sick time used
• Any intermittent days an employee worked
• Employee’s last date of work
• Confirmation of valid wages
• Wages paid to your employee during their disability period

Report Temporary Disability Benefits on Your Employee's W-2

Year-end statements for Temporary Disability Insurance benefits are available online for employers to download in January for the preceding calendar year. Only a portion of the Temporary Disability Insurance benefits paid are taxable by the federal government (they are not taxed by the State of New Jersey). They are considered third-party sick pay or other wages. We do not issue W-2s to individuals who receive Temporary Disability benefits during the calendar year. It is your responsibility to report the taxable information on your employee’s W-2. You should also let your employee know where the information is listed on the W-2.

How the Program Is Funded

New Jersey workers and employers contribute to the cost of the Temporary Disability program.

The contribution rate for employers varies from 0.10% to 0.75%.

For 2023, employers contribute between $41.10 and $308.25 on the first $41,100 earned by each employee during this calendar year.

For 2024, employers contribute between $42.30 and $317.25 on the first $42,300 earned by each employee during this calendar year.

On January 1 of each year, the taxable wage cap changes.

The Minimum Gross Earnings Requirements

When your employee's claim is under review, we consider the gross earnings reported for the 5 completed quarters prior to the week their disability began. The first 4 quarters of that time frame is the newly defined base year.

To qualify in 2023, they must have worked 20 weeks earning at least $260 weekly, or have earned a combined total of $13,000 in those four quarters (the base year).

To qualify in 2024, they must have worked 20 weeks earning at least $283 weekly, or have earned a combined total of $14,200 in those four quarters (the base year).

How Benefits Are Calculated

1. First, we calculate the average weekly wage. We do this by dividing the employee's base year earnings by the number of base weeks.
   In 2023, a "base week" is any week they earn $260 or more.
   In 2024, a "base week" is any week they earn $283 or more

For example, let’s say Steve's first day of disability is Friday, March 1, 2024. To see how much he would receive weekly on Temporary Disability Insurance, we look at the wages you reported for the first four of the last five completed quarters: