PEOs in New Jersey

What makes New Jersey different

• PEOs must register as employee leasing companies with the Division of Employer Accounts under N.J.S.A. 34:8-67 et seq., file audited financial statements showing positive working capital or post security, and update their New Jersey client list annually.
• New Jersey runs statutory Temporary Disability Insurance and Family Leave Insurance. For 2026 the employee contribution rates are 0.19 percent (TDI) and 0.23 percent (FLI) on a $171,100 wage base, with the employer TDI share experience-rated. Rates reset annually.
• The 2026 unemployment taxable wage base is $44,800, among the highest in the country, so the difference between rates matters far more per employee than in states with a $9,000 base.
• The Earned Sick Leave Law gives nearly all employees 1 hour of paid sick leave per 30 hours worked, up to 40 hours per year.
• New Jersey’s WARN law is the only state layoff statute that mandates severance: employers with 100 or more employees owe 90 days of notice plus one week of pay per year of service for covered mass layoffs.
• Employers with 25 or more employees that do not offer a retirement plan must enroll workers in the RetireReady NJ state auto-IRA program.

PEO regulation in New Jersey

New Jersey registers employee leasing companies through the Department of Labor and Workforce Development, Division of Employer Accounts. Registration requires audited financials or posted security, and out-of-state PEOs with fewer than 50 covered New Jersey employees can hold a limited registration. Confirm a candidate PEO’s registration with the Division before signing.

What a PEO does and does not solve here

New Jersey proposals should identify which unemployment and disability accounts receive wages, whether the PEO uses the state TDI plan or an approved private plan, and how the wage base affects the annual tax. Get the account structure and charged rate in writing for each line.

Common questions

Do I keep my New Jersey unemployment experience rate in a PEO?

Get the account and rate treatment in writing. New Jersey's registration framework requires PEOs to report client relationships to the Division of Employer Accounts, and the treatment depends on the arrangement. Apply each quoted rate to the $44,800 wage base to compare the annual tax per employee.

Does a PEO handle New Jersey TDI and FLI?

Yes, a properly registered PEO administers both statutory lines and the employee deductions through payroll. Some employers instead use an approved private TDI plan. Confirm which plan applies, which entity holds it, and how the contributions appear on the invoice, because carrying these lines incorrectly is a statutory violation.