Payroll and Benefits Guide - United States - New Jersey

United States - New Jersey
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Currency

United States Dollar (USD)

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Capital

Trenton
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Employer Taxes

12.05% – 23.90%
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Date Format

mm/dd/yyyy
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Fiscal Year

1 Jan – 31 Dec

Fun Facts

The state’s capital is Trenton, and its largest city is Newark.

New Jersey is known as the “Garden State”.

New Jersey is home to the world’s first recorded baseball game, which took place in Hoboken in 1846.

New Jersey has a thriving arts and entertainment scene.

New Jersey has a strong agricultural industry.

New Jersey is known for its vibrant boardwalk culture.

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Contributions

Employee Payroll Tax

Contribution TypeRate
New Unemployment Insurance0.425%
Disability Insurance0.14%
Family Leave Insurance0.14%
FICA Social Security6.20%
FICA Medicare1.45%
Additional tax0.90%

Employer Payroll Tax

Contribution TypeRate
Unemployment Insurance0.60% – 6.40%
Unemployment – New Employer3.10%
Disability Insurance0.10% – 0.75%
FICA Social Security6.20%
FICA Medicare1.45%
FUTA0.60% -6.00%

Payroll

Payroll Cycle

Employees are generally paid either semi-monthly or monthly.

13th Salary

There are no legislations for 13th month payments in New Jersey.

Work Hours and Week

The workweek consists of a maximum of 40 hours per week, 8 hours per day.

Overtime

New Jersey adheres to the Fair Labour Standards Act (FLSA), and overtime is paid where employees work more than 40 hours in a single working week. The employer must pay 150% of the regular salary rate for the extra hours worked as overtime. Similarly, if employees are scheduled to work on weekends or rest days, no additional payment is required. However, should an employer request an employee to work in exceptional circumstances on these days, then overtime will be payable at 150% of the regular salary rate for the extra hours worked.

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Leave

Paid Time Off

New Jersey does not have any state statute governing the amount and payment of vacation time; however, it is common for employers to decide whether to offer paid or unpaid vacation leave. This must comply with employment law and must be stipulated in the collective bargaining agreements.

Public Holidays

There are 11 official holidays, however private employers are not required to provide either time off or overtime pay on these days.

Sick Days

In New Jersey, employers must provide one hour of paid sick leave for every 30 hours worked, up to an annual maximum of 40 hours of paid sick leave.

It is common for an employer to follow the Family and Medical Leave Act (FMLA), which provides certain employees with up to 12 weeks of unpaid, job-protected leave per year for specific family and medical reasons (maternity leave, serious illnesses, or if the employee needs to care for a spouse or child).

Employees are eligible for FMLA if they have worked for their employer for at least one year, completed a minimum of 1,250 hours over the past year, and worked at a location where the company employs 50 or more employees within 75 miles.

In addition to the FMLA, New Jersey has the New Jersey Family Leave Act provides employees with benefits after the recovery period for up to 6 weeks, increasing to 12 weeks of leave in 24 months for specific employees as below:

  • Employers with 50 or more employees
  • Employees who have worked at least 100 hours during the last 12 months
  • And employees who must care for a child within a year of birth, placement for adoption, foster care, or caring for a family member.

Maternity Leave

The FMLA (see sick leave above) provides certain employees with up to 12 weeks of unpaid, job-protected leave per year for specific family and medical reasons (maternity leave, serious illnesses, or if the employee needs to care for a spouse or child).

The FMLA provides:

  • Twelve working weeks of leave in any one year for a child’s birth and to care for the newborn child within one year of birth.
  • The employee may be entitled to leave for the adoption or foster care of a child and care for the newly placed child within one year of placement.

New Jersey residents also benefit from the Temporary Disability Insurance (TDI) Program, which provides employees who are temporarily unable to work due to disabilities related to pregnancy or childbirth with ten weeks of paid leave up to two-thirds of the regular salary. The employee must take up to four weeks of leave before the birth and up to six weeks after.

Paternity Leave

The FMLA (see sick leave above) provides certain employees with up to 12 weeks of unpaid, job-protected leave per year for specific family and medical reasons (maternity leave, serious illnesses, or if the employee needs to care for a spouse or child). The FMLA provides:

  • Twelve working weeks of leave in any one year for a child’s birth and to care for the newborn child within one year of birth.
  • The employee may be entitled to leave for the adoption or foster care of a child and care for the newly placed child within one year of placement.

Parental Leave

The FMLA (see sick leave above) provides certain employees with up to 12 weeks of unpaid, job-protected leave per year for specific family and medical reasons (maternity leave, serious illnesses, or if the employee needs to care for a spouse or child). The FMLA provides:

  • To care for the employee’s spouse, child, or parent who has a severe health condition.
  • A serious health condition that makes the employee unable to perform the essential functions of their job.
  • any qualifying exigency arising out of the fact that the employee’s spouse, son, daughter, or parent is a covered military member on “covered active duty.”

OR

  • Twenty-six working weeks of leave during a single one-year period to care for a covered servicemember with a serious injury or illness if the eligible employee is the service member’s spouse, son, daughter, parent, or next of kin (military caregiver leave).

The New Jersey Family Leave Act provides the employee with benefits after the recovery period for up to 6 weeks, increasing to 12 weeks of leave in 24 months for specific employees as below:

  • Employers with 50 or more employees
  1. Employees who have worked at least 100 hours during the last 12 months
  • And employees who must care for a child within a year of birth, placement for adoption, foster care, or caring for a family member.

Termination

Termination Process

Except in mass dismissals or as provided for in an employment contract or a collective bargaining agreement, U.S. law does not impose a formal “notice period” to terminate an individual employment relationship, and employment is stipulated “at will.” This means that either the employer or the employee may end the employment relationship without giving either notice or reason, provided it is not illegal, notable discrimination on the grounds of a category protected by law, etc., and as per the Federal Worker Adjustment and Retraining Notification Act (WARN).

The employment contracts of executives and other highly skilled individuals often incorporate a “just cause termination” clause which mandates that the employer may only terminate the employee for “cause” and lists the permissible grounds. In such cases, the parties negotiate the foundations for a “just cause” termination case-by-case.

Notice Period

In New Jersey, most employees are employed “at-will,” and either party can terminate the employment relationship without notice. In New Jersey, pay out of unused vacation time is not required by law. Still, generally, employers will pay an employee for unused vacation days, provided the employee gave some advanced notice of resignation; there is no official notice period. Still, in general practice, two weeks’ notice is a minimum requirement.

In mass dismissal cases the Worker Adjustment and Retraining Notification Act (WARN Act) must be followed, and employers must give 60 days’ notice to impacted employees.

Severance Pay

Except as otherwise provided in an employment contract or collective bargaining agreement, employers need not make severance payments to terminated employees. Employers who choose to offer severance would need to have the provisions within the employee’s contract and agreed by both parties, many employers choose to offer severance payment linked to the employee’s length of service. Most common in New Jersey is one week pay for every year of service.

Probation Period

Probation Period

No legal provision governs a formal “trial /probation period.” However, it is common practice for employers to set a performance evaluation after an initially stated period of employment of 90 days.

Immigration

Foreign nationals without permanent resident status or a work visa are not permitted to work in the United States. An employer seeking to hire a foreign national may file a petition with the United States Department of Homeland Security/ United States Citizenship and Immigration Services (“USCIS”) for an employment visa on behalf of the prospective employee. If the petition is approved, the prospective employee must obtain a “visa stamp” from a United States embassy or consulate (Canadian citizens are exempt from this requirement). To get a temporary U.S. work visa, an employer must file a petition with U.S. Citizenship and Immigration Services (USCIS).

VAT

New Jersey has a minimum combined Sales Tax Rate of 6.63% (State tax at 6.6% and Local tax at 0.03% USD)