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New Jersey is one of five states that administers temporary disability benefits.
The bill, passed by the Senate on Thursday, would raise the maximum weekly temporary disability benefit to $230 from $140 over the next five years.
Senate Bill 1661 (Kuehl) extends temporary disability benefits to workers to take time off to care for a family member.
Under state law, New Yorkers can receive six to eight weeks of temporary disability benefits of up to $170 a week after giving birth.
New Jersey and New York are among five states that administer temporary disability benefit plans.
The company asked that the proxy be disallowed and cut off temporary disability benefits to the employee filing the proxy.
That means the lowest-income and highest-income wage earners in New Jersey pay about the same $100 in annual payroll taxes for temporary disability benefits.
While New Jersey allows women to collect temporary disability benefits for up to 12 weeks after giving birth, it offers no pay for parents who just adopted children or for fathers of newborns.
"Four out of five workers are covered by the temporary disability benefits that Governor Whitman intends to sell," State Assemblyman Joseph J. Roberts Jr. of Camden County said.
Yet the proposal to deny worker's compensation and temporary disability benefits to illegal aliens was opposed by legislators who said that such a law might actually encourage companies to hire aliens in the hope of avoiding having to pay such benefits.