New Jersey Paid Sick Leave Law
What employers need to know
Posted on 12-14-2018, Read Time: Min
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New Jersey recently enacted a statewide mandatory paid sick leave law, requiring virtually all employers in the state to provide up to 40 hours of paid sick leave per year. The New Jersey Paid Sick Leave Act (the “Act”) went into effect on October 29, 2018, making New Jersey the 10th state to enact such a law.
Just about every employer with employees in New Jersey will feel the impact of this new law in one way or another. All employers should ensure their policies and practices are compliant with the Act.
Here’s an overview of what New Jersey employers need to know:
Who Is Covered?
Covered Employees: The Act applies to most employees working in the state “for compensation.” The Act expressly excludes employees in the construction industry employed under a collective bargaining agreement, per diem healthcare employees, and public employees who already have sick leave benefits.
Covered Employers: The Act broadly applies to any business entity, no matter the size, that employs employees in New Jersey, including temporary help service firms that hire temporary or part-time employees. However, the Act expressly excludes public employers who are required to provide their employees with sick leave.
Covered Employers: The Act broadly applies to any business entity, no matter the size, that employs employees in New Jersey, including temporary help service firms that hire temporary or part-time employees. However, the Act expressly excludes public employers who are required to provide their employees with sick leave.
How Is Paid Sick Leave Accrued?
The Act requires employers to designate a period of 12 consecutive months as the employees “benefit year”, in which employees will accrue up to 40 hours of sick time at a rate of 1 hour per 30 hours worked. Current employees began accruing sick time on the effective date of the Act (October 29, 2018). Employees hired after the effective date of the Act begin accruing sick time on the first date of their employment.
How Can Paid Sick Time Be Used?
Employees can start using their accrued sick time after their 120th day of employment for the following:
- Diagnosis, care, or treatment of, or recovery from, an employee’s own mental or physical illness, including preventive medical care;
- Aid or care for a covered family member during diagnosis, care, or treatment of, or recovery from, the family member’s mental or physical illness, including preventive medical care;
- Circumstances related to an employee’s or their family member’s status as a victim of domestic or sexual violence (including the need to obtain related medical treatment, seek counseling, relocate, or participate in related legal services);
- Closure of an employee’s workplace or of a school/childcare of an employee’s child because of a public official’s order relating to a public health emergency;
- Time to attend his or her child’s school-related conference or to attend a meeting regarding the care provided to the child in connection with the child’s health conditions or disability.
What Rules Are in Place Regarding Carryover and Payout of Paid Sick Time?
Maximum Carryover: The Act does not require employers to permit employees to carry over more than 40 hours of accrued sick time in a single benefit year.
Optional Buyout: Employers may, but are not obligated to, offer to pay employees for their unused accrued sick time in the final month of the benefit year. If the employee agrees to receive the payment, they may choose a payment for the full amount of their unused accrued sick time or for 50 percent of such time.
If an employer frontloads the entire amount of sick time, it must either pay the employee for the full amount of unused accrued sick time in the final month of the employer’s benefit year or carry forward any unused sick time to the next benefit year. Employee approval is not required.
The payment amount shall be based on the same rate of pay that the employee earns at the time of the payment.
Optional Buyout: Employers may, but are not obligated to, offer to pay employees for their unused accrued sick time in the final month of the benefit year. If the employee agrees to receive the payment, they may choose a payment for the full amount of their unused accrued sick time or for 50 percent of such time.
If an employer frontloads the entire amount of sick time, it must either pay the employee for the full amount of unused accrued sick time in the final month of the employer’s benefit year or carry forward any unused sick time to the next benefit year. Employee approval is not required.
The payment amount shall be based on the same rate of pay that the employee earns at the time of the payment.
What Kind of Notice and Documentation Is Required?
Foreseeable Absences: Employers may require advance notice, not to exceed seven calendar days, of the intention to use the leave and its expected duration.
Unforeseeable Absences: Employers may require employees to give notice of the intention to use the leave as soon as practicable, provided that the employer has notified the employee of this requirement.
Absences of Three Days or More: If an employee is absent for at least three consecutive days, the employer may require documentation that confirms the employee used sick leave for a covered purpose.
Unforeseeable Absences: Employers may require employees to give notice of the intention to use the leave as soon as practicable, provided that the employer has notified the employee of this requirement.
Absences of Three Days or More: If an employee is absent for at least three consecutive days, the employer may require documentation that confirms the employee used sick leave for a covered purpose.
DOL’s Proposed Regulations and FAQs
The state Department of Labor and Workforce Development (DOL) has published a set of proposed regulations and Frequently Asked Questions (FAQs), aimed at addressing unanswered questions about the law. Here’s a brief summary of the important issues addressed by the proposed regulations and FAQs:
- An employer who has a compliant PTO policy is not required to record leave used under the Act separate from leaves used for other purposes.
- An employer can use different methods of awarding paid sick time for different types of employees.
- An employer cannot use an employee’s anniversary year as its designated benefit year for a paid sick time.
- An out-of-state employer must provide paid sick leave to employees who perform all work in NJ.
- An employee who works both in NJ and another state is entitled to sick leave only if employee routinely performs some work in NJ and the employee’s base of operations or the place from which such work is directed and controlled is in NJ.
- DOL has published proposed methods to calculate rates of pay for employees that do not have a fixed rate, e.g. employees with two or more rates, employees working on a commission basis, and employees working for gratuities.
DOL’s Mandatory Workplace Poster
The DOL has published the New Jersey Paid Sick Leave Notice, which can be found on its website. Employers were required to post the notice in a conspicuous place at all worksites and distribute it to all employees by November 29, 2018, and also again each time thereafter when an employee is hired or requests such a notice.
Next Steps?
Employers should review their paid time off, vacation, or other paid leave policies to ensure compliance with the Act and proposed regulations. If not already done so, employers would be well-advised to establish recordkeeping procedures that are consistent with the requirements of the Act and regulations. Employers should also inform and train managers and supervisors of any new policy changes.
Lastly, employers should reassess their policies once the DOL issues its final regulations, which is expected sometime in early 2019. The finalized regulations may require changes in policies and practices.
Lastly, employers should reassess their policies once the DOL issues its final regulations, which is expected sometime in early 2019. The finalized regulations may require changes in policies and practices.
Author Bio
| Alvaro Hasani is an attorney in the New Jersey office of national labor and employment law firm, Fisher Phillips. Connect Alvaro Hasani |
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