New Jersey Disability Insurance Benefits Law Changes: What New Jersey Small Business Owners Need to Know

Are you a business owner in New Jersey mandated to purchase New Jersey disability insurance?

2020 brought major changes in the New Jersey Temporary Disability Benefits (NJ TDB) Law that business owners with one or more employees need to know. 

This applies to every type of business in New Jersey, including: 

Law firms

Agricultural businesses


Tech sector and telecom businesses

Auto dealerships

Financial institutions… and many others. 

What Is New Jersey Disability Insurance?

New Jersey disability insurance (NJ TDB) is a statutory employee benefit that is partially funded by the employee and partially by the employer. It entitles employees to partial salary reimbursement for up to 26 weeks due to an off-the-job illness or injury. (Worker’s compensation covers job-related illnesses and injuries.) 

For the first half of the year, NJ TDB benefits increased to 66.67% (effective 1st Jan 2020) of a worker’s average weekly salary (to a max of $667 per week). In the second half, the benefits increased to 85% (effective 1st July 2020) of a worker’s average weekly salary (to a max of $881 per week). 

For the first time, employees are contributing premium on a different taxable wage to pay for the benefit increases. Employees are contributing .26% on the first $134,900 of earnings (maximum annual contribution being $350.74), which was .17% in 2019 on the first $34,400 in earnings (maximum annual contribution being $58.48). This represents a premium increase of nearly 6 times since the last increase for New Jersey disability insurance. 

What Small Business Owners in New Jersey Need to Do 

  • Review your current New Jersey disability insurance plan. Are you still writing your New Jersey disability insurance with the state? 
  • Obtain a copy of your AC-174.1, plus take a census of your employees’ – recording their gender and salary.  

  • Contact EZTDB to help you shop around for a better deal on TDB through a private plan. You no longer need to obtain signatures (employee consent) to switch from a State TDB plan to a private plan, making it easier than ever to save money and get better service through a private carrier.  Plus, the carrier picks up the taxes, resulting in more savings for you as a business owner. 

Let EZTDB Write Your New Jersey Disability Insurance Plan

Let EZTDB write your private disability insurance plus ancillary benefits, including vision and dental coverage, long-term disability, and group life / AD&D.

With 45+ years in business, we have developed carrier partnerships resulting in first-class service and excellent savings for New Jersey business owners.