New Jersey Employment Law Updates – 2026

C2 Essentials is providing this compliance update to highlight key New Jersey employment law developments impacting employers in 2026. While some of these laws are newly effective and others are entering active enforcement phases, all present meaningful compliance risks that employers should address proactively.

Proposed Restrictions on Non-Compete Agreements Pending Legislation

New Jersey continues to consider legislation that would significantly restrict or effectively prohibit most non-compete agreements. The proposal includes requirements such as advance notice, compensation during restricted periods (“garden leave”), and limitations based on employee earnings. Certain workers may be excluded entirely from non-compete enforcement. While no effective date is in place, the legislative direction is clear and consistent with broader national trends. Employers relying on non-competes face forward-looking risk, as existing agreements may become unenforceable or require significant revision if the law is enacted. Employers may need to shift away from traditional non-compete agreements toward alternative protections such as non-solicitation and confidentiality agreements.

Pay Transparency Requirements Effective: June 1, 2025 (Now in Active Enforcement Phase)

New Jersey’s pay transparency law is now in its first full year of enforcement. Although not new in 2026, enforcement and regulatory scrutiny are increasing. Employers without clearly defined and documented compensation structures face heightened risk, particularly where pay ranges are inconsistent across similar roles or lack supportable methodology. Employers must include a good-faith salary or hourly wage range, along with a general description of benefits and other compensation, in job postings. Employers should develop and document formal compensation ranges and review job postings for compliance.

Expansion of the New Jersey Family Leave Act (NJFLA) Effective: July 17, 2026

New Jersey has enacted significant changes to the NJFLA that expand both employer coverage and employee eligibility. The changes lower the employer threshold from 30 to 15 employees and reduce employee eligibility requirements to 3 months of service and 250 hours worked during the previous 12 months (down from 12 months / 1,000 hours worked). More employees will now be entitled to job-protected leave under NJFLA.

NJFLA provides up to 12 weeks of job-protected family leave in a 24-month period. Employees may take this leave continuously, intermittently, or on a reduced schedule, but the total protection is capped at 12 workweeks. NJFLA provides job protection for qualifying family leave events. In most cases, NJFLA runs together with New Jersey Temporary Disability Insurance (TDI) and New Jersey Family Leave Insurance (FLI)—both state programs that provide partial wage replacement to employees--but all are separate programs with different eligibility rules and administration.

· New Jersey Family Leave Act (NJFLA) provides unpaid job-protected leave for family-related reasons.

• Bonding with a newborn, adopted, or foster child

• Caring for a family member with serious health condition

• Does not cover an employee’s illness recovering from surgery, taking disability leave for their own medical issue or being unable to work due to their personal health condition

• Covered Employers must provide eligible employees with job-protected family leave, maintain their benefits during leave, and reinstate the employee to the same or equivalent position upon return. At the time leave is requested Employers provide notice of employee rights and responsibilities, certify employee-provided documentation centered on the family member or bonding event, and designate if the leave as NJFLA-qualifying.

· New Jersey Temporary Disability Insurance (TDI)

• Pays partial wages when an employee is unable to work due to their own non-work-related medical condition (e.g., illness, surgery, pregnancy recovery)

• Does not require employers to hold a job open or prohibit termination while someone is on TDI

• Employers cannot discriminate or retaliate against employees due to a disability or medical condition as TDI may create indirect job protection depending on facts (e.g., reasonable accommodation requirements)

• Employees file TDI claims directly with the State of New Jersey

• Employees qualify if they cannot work due to a non-work-related medical condition, have sufficient recent earnings in covered employment, and provide medical certification. The State determines eligibility and pays benefits. Employers only verify employment and wage information when requested.

· New Jersey Family Leave Insurance (FLI) provides wage replacement when an employee is out of work for qualifying family-related reasons.

• Bonding with a newborn, adopted, or foster child

• Caring for a family member with serious health condition

• Military family leave (qualifying exigency related to a family member’s deployment)

• Does not guarantee job protection nor require employers to reinstate employees

• Employees file FLI claims with the State of New Jersey

• Employees qualify for FLI if they have sufficient recent wages in covered employment and are taking leave for an approved family reasons. The State determines eligibility and pays benefits; employers only verify employment and wage information when requested.

New Jersey Temporary Disability Insurance covers employees when they cannot work due to their own medical condition, while Family Leave Insurance covers family-related leave such as bonding or caregiving. They don’t apply for the same reason for absence, but they may be used sequentially during events like childbirth where TDI covers recovery and FLI covers bonding. Your HR team will review employee handbooks and advise if any changes are needed.

If you have any questions or would like assistance in reviewing your policies, please contact your HR team.