New Jersey Passes Paid Sick Leave Law
What Do Employers Need to Know?
On May 2, 2018, Governor Phil Murphy signed a mandatory paid sick leave law (“Paid Sick Leave Act” or the “Act”) passed by the New Jersey Legislature in April. The new Paid Sick Leave Act applies to most employees in the State of New Jersey and is set to take effect on October 29, 2018. 

Significantly, the Act prohibits towns and cities from enacting ordinances regarding earned sick time and preempts municipal ordinances currently in effect – a provision that should help simplify compliance efforts by New Jersey employers in this complicated area.  
Which employers are covered?

All employers – regardless of size – that employ any employees in New Jersey (except public employers required to provide their employees with fully paid sick leave under any other law). The definition of “employer” expressly includes temporary help service firms who place employees on client sites.
Which employees are required to receive sick pay?

All employees who work in New Jersey - regardless of hours worked - with very limited exceptions (including employees performing service in the construction industry under contract pursuant to a collective bargaining agreement, or certain per diem health care employees or public employees provided with fully paid sick leave under any other law).
How much paid sick time must covered employers give to New Jersey employees?

Covered employers must provide one (1) hour of earned sick time for every 30 hours worked up to 40 hours per benefit year (referred to here as the “accrual process”). “Benefit year” is defined in the Act as the period of 12 consecutive months, as established by the employer, in which an employee will accrue and use earned sick time. Once an employer identifies the benefit year, it cannot be changed unless the employer notifies the Commissioner of Labor and Workforce Development (“Commissioner”) of the change in accordance with anticipated regulations to be promulgated under the Act. 
Can an employer front-load the sick time?

Yes . As an alternative to the accrual process, employers can provide employees with the full amount (40 hours) of earned sick time for a benefit year on the first day of the benefit year.
Does the Act require earned, unused sick time to be carried over to the next benefit year?

Yes . Employers using the accrual process must permit an employee to carry over up to 40 hours of earned, unused sick time to the next benefit year unless the employer offers and the employee chooses to accept payment for earned, unused sick time (either the full amount or 50 percent) in the final month of the benefit year.

  • If the employee declines payment or agrees to receive a payment for 50 percent of the amount, the employee is entitled to carry forward the balance of earned, unused sick time.  
  • If the employee agrees to payment for the full amount of earned, unused sick time, the employee is not entitled to carry forward any earned sick time to the proceeding benefit year. 

Employers who opt to front-load sick time must either:

  • Pay the employee for the full amount of unused, earned sick time in the final month of the employer’s benefit year (but only if the employee front-loads sick time for that employee in the next benefit year); or
  • Carry forward any earned, unused sick time to the next benefit year.

The Act does not require an employer to permit an employee to accrue or use more than 40 hours of earned sick time in any benefit year, or carry forward to the next benefit year, more than 40 hours of earned, unused sick time. 
What if an employer already provides Paid Time Off (“PTO”) time to employees?

An employer does not need to provide additional paid sick time to employees, and will be in compliance with the Act, so long as the employer offers PTO (for example personal, vacation or sick days) that is fully paid and may be used for the same purposes and in the same manner provided by the Act. In addition, PTO must be earned at a rate equal to or greater than the rate required by the Act. 
For what types of absences can an employee use sick time?

E mployees may use earned sick time for:

  • Time needed for diagnosis, care or treatment of, or recovery from, an employee’s mental or physical illness, injury or other adverse health condition, or for preventive medical care for the employee;
  • Time needed for the employee to aid or care for a family member of the employee during diagnosis, care or treatment of, or recovery from, the family member’s mental or physical illness, injury or other adverse health condition, or during preventive medical care for the family member;
  • Absences due to circumstances resulting from the employee, or a family member of the employee, being a victim of domestic or sexual violence; 
  • Time during which the workplace or the employee’s child’s school or childcare is closed by order of a public official due to a public health emergency; or
  • Time to attend a school-related conference, meeting, function or other event requested or required for the employee’s child, or to attend a meeting regarding care provided to the child in connection with the child’s health conditions or disability. 
When can employees begin using sick time earned under the Act?

An employee begins to earn sick time under the Act on October 29, 2018 . The date an employee can begin using earned sick time under the Act depends on when the employee commences employment.

  • Employees hired and working before October 29, 2018 may use earned sick time beginning on the 120th calendar day after their employment commencement date (those who have been working for the employer for 120 days or more prior to October 29, 2018 are able to use any earned sick time immediately upon accrual).
  • Employees hired after October 29, 2018 begin to earn sick time upon their employment commencement date and are eligible to use earned sick time on the 120th day after they begin working.
  • Employees may subsequently use earned sick time as soon as it is accrued.
In what increments can sick time be taken?

An employer may choose the increments in which employees may use earned sick time. However, the increment may not exceed the number of hours the employee was scheduled to work during the shift for which the earned sick time is used. For example, the employer cannot charge an employee for a four hour increment of earned sick time if the employee was only scheduled to work a three hour shift.  
Does the employee have to give the employer notice before using sick time?

Yes.  For foreseeable leaves, an employer may require employees to provide notice of the intent to take leave and the expected duration, but the required notice period may not be longer than seven (7) days. For unforeseeable leaves, an employer may require an employee to give notice as soon as practicable, but the employee must be told of this requirement. 
Do employers have to provide notice of the Act?

Yes . The Commissioner will issue a form of notice that employers must conspicuously post in a place or places accessible to all employees in each of the employer's workplaces. In addition, the employer must provide all current employees with a copy of the notice within thirty days of issuance and all new hires with the notice upon commencement of employment. The employer must also give employees a copy of the notice upon request.
Does this Act preempt all municipal sick pay laws in New Jersey?

Yes .
Does the employer have to pay out any earned, unused sick time upon termination?

No, unless the employer has a policy that provides for a pay out.
Do I have to keep records?

Yes.  Employers must retain records documenting hours worked by employees and earned sick time taken by employees for a period of five years. 
Is there anything else an employer should know?

Yes. The Act recognizes a private right of action for employees. Remedies may include, among other things, liquidated damages in an amount equal to the actual damages sustained by the employee. In addition, the Act contains an anti-retaliation and anti-discrimination provision, which provides for a “rebuttable presumption” of retaliation if an employer takes adverse action against an employee within 90 days of certain activity (including, for example, the employee’s filing of a complaint, cooperating in an investigation, opposing any policy unlawful under the Act, or informing others of their rights under the Act).
  • Review all applicable sick time and PTO policies to ensure that such policies are compliant with the Act.

  • Employers who do not have a policy, or who do not currently offer paid sick time or PTO, must provide the minimum leave under the law. A written policy is strongly recommended.

  • Employers should also ensure that managers, HR, operations and/or payroll professionals are aware of these changes and have a system in place to accurately accrue sick time (or front load), provide required notice under the Act and properly retain all relevant records.
Please contact Katherin Nukk-Freeman , or the NFC attorney with whom you normally work with questions or concerns regarding compliance with this new Act.
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