When it comes to changes in benefits law, state governments move much faster than the feds. The latest trend: mandatory paid medical and/or family leave.

New Jersey recently became the third state to require paid leave. The new law supplements current FMLA and state family and medical leave laws.

New Jersey employers must give employees six weeks of paid medical leave, effective July 1, 2009. California enacted its plan in 2004. Washington approved five weeks of leave starting in Oct. 2009, but they can’t decide how to pay for it.

In New Jersey, the law applies to all employers – even those with fewer than 50 employees. It’s expected that paid leave will allow more people to take off work for FMLA reasons.

Cause for concern?

Increased leave-taking is one of the top concerns for employers. They’re afraid that paid leave won’t just make it easier for people who need it to take it. They think it’ll also be attractive to people who don’t need it but want paid time off from work. Key eligibility requirements:

• Employees must give 15 to 30 days advanced notice, unless it’s an emergency

• If the leave’s not for childcare, employees have to get certification from their healthcare provider

• Employers can require employees to use up to two weeks of sick, vacation, and other PTO before they qualify for paid leave, and

• Employers can get state approval to provide a similar benefit under a private insurance plan.

Who’s worried most: small employers who are otherwise exempt from FMLA. The New Jersey law is a brand new requirement for them and many companies are afraid it’ll be tough for the organization to pick up the slack for leave takers. Meanwhile, HR and supervisors will have to deal with added paperwork.

Employees foot the bill

But, there’s some good news: As long as an employer doesn’t fall under the umbrella of FMLA or the New Jersey Family Leave Act, it can permanently replace employees who take leave.

In addition, employers won’t have to foot the bill. Employees are compensated for leave through a payroll tax. The plan’s set to take effect July 1, 2009. They’ll start taking out payroll deductions January 1, 2009.

Payroll deductions will equal about $33 a year per employee. Employees won’t be able to collect their entire payroll. Instead they get two-thirds of their salary, up to $524 per week.