Paid Sick Leave Comes to New Jersey: Time To Update Your Employee Handbook

In recent years many New Jersey municipalities passed varying ordinances requiring employees within their jurisdictions to be afforded paid sick leave benefits. To the relief of those employers who were dealing with the patchwork of local sick leave ordinances, on May 2, 2018, Governor Murphy signed New Jersey’s first state-wide paid sick leave act into law, pre-empting all local ordinances in favor of uniform paid sick leave requirements. The act becomes effective on October 29, 2018.

Although most employers provide some measure of paid time-off benefits, they must nevertheless ensure that existing policies meet the minimum requirements of the new paid sick leave act. For those employers who do not provide any paid time off benefits for sickness, they will now be required to do so for those absences that fall within the law.

Coverage: Under the new law, all New Jersey employers, regardless of size, must provide one hour of paid sick leave for every 30 hours worked to each covered employee, including temporary employees, working in the State. Construction employees covered by a collective bargaining agreement, health care employees and public employees with paid sick leave benefits are excluded from coverage.

Accrual of Paid Sick Time: Employees may accrue up to 40 hours of paid sick leave in a given benefit year, defined as any consecutive 12 month period established by the employer. Alternatively, the employer may opt to “front-load” the full complement of 40 hours of paid sick leave at the start of the benefit year. Once the benefit year is established by the employer, it can only be changed with notice to the Commissioner pursuant to Department of Labor and Workforce Development regulations.

Current employees and those hired prior to the effective date will start to accrue paid sick leave benefits on the effective date; new employees will begin to accrue paid sick leave benefits upon the commencement of employment. In both cases, employees are not permitted to start utilizing accrued paid sick leave benefits until 120 days thereafter.

Carry Over of Accrued Paid Sick Time: Employees are entitled to carry over up to 40 hours of paid sick leave from one benefit year to the next. Employers may elect to offer employees a “buy back” of accrued paid sick leave at the end of each benefit year, which the employee is free to accept for either the full amount or 50% of the full amount of unused sick time, with the balance being carried over to the next benefit year.

Use of Paid Sick Leave: Employees are entitled to use paid sick leave benefits for any of the following reasons:

  • time off for diagnosis, care, or treatment of their own mental or physical illness;
  • time off for diagnosis, care or treatment for a family member (defined as a child, grandchild, sibling, spouse, domestic partner, civil union partner, parent or grandparent of an employee or a spouse, domestic partner, civil union partner or a parent or grandparent of the employee, or a sibling of a spouse, domestic partner or civil union partner of the partner);
  • time off needed due to circumstances resulting from the employee, or a family member of the employee, being the victim of domestic or sexual violence;
  • time off during which the employee is not able to work because of the closure of the employee’s workplace, or the school or daycare of a child of the employee.
  • time off needed to attend school-related conferences, meetings, functions or other events requested or required by a child’s school, or to attend a meeting regarding the care provided for the child’s health conditions or disability.

Employers may choose the increments in which employees may use earned sick leave, but in no event may employers require employees to use sick time in increments that exceed the employee’s normal scheduled work shift.

Notice Requirements: If time off is foreseeable, the employer may require advanced notice from the employee not to exceed 7 days prior to the date of the leave. In such case, the employee shall make a reasonable effort not to disrupt the employer’s operations. If time off is unexpected, the employee must give notice to the employer as soon as practicable.

Only when the sick leave is for three or more consecutive days can the employer require documentation that the leave is being taken for one of the permitted purposes under the law. The nature and type documentation that an employer may require is specified in detail in the law.

Payout of Accrued Sick Time Not Required: An employer is not required to pay an employee for accrued sick leave upon termination, resignation, retirement or other separation from employment.

Record-Keeping, Posting Requirements, and Violations: Employers are required to retain records documenting hours worked and paid sick leave taken by employees for a period of five years. If the employer fails to maintain such records, it shall be presumed that the employer failed to comply with the new law. In addition, employers must distribute to employees and post in a conspicuous location a notification of rights to paid sick leave benefits to be provided by the Commissions of the New Jersey Department of Labor and Workforce Development.

Violations of any provisions of the act are regarded as violations of the New Jersey Wage and Hour Law with all the consequent penalties under that act. Moreover, employees who prevail in civil actions for non-payment of paid sick leave benefits are entitled to double damages.

No Retaliation: As with most New Jersey employment laws, employers may not retaliate against employees for exercising their right to request and use paid sick leave. Moreover, employers are prohibited from counting any earned sick leave days taken by employees as an absence that may result in the employee being subject to any disciplinary action.

Finally, the law provides for a rebuttable presumption of unlawful retaliation if the employer takes adverse employment action against an employee within 90 days of i) filing a complaint alleging a violation; ii) reporting or cooperating with any person investigation a violation; iii) opposing any unlawful policy or practice under the act; or iv) informing any individual of their rights under the act.

Successor Employers: Employees who remain with a successor employer are entitled to all of the accrued paid sick leave benefits accrued while employed by the prior employer.

What To Do Now: Employers should review their current paid sick leave or other paid time-off policies to make certain they comply with the requirements of the earned sick leave act. In addition, those employers with separate sick and vacation leave policies may want to consider transitioning to a Paid Time Off bank for all time away from work to lessen some of the administrative and other impacts of the new law. For those employers that do not provide any paid sick time benefits, they must adopt and implement an appropriate paid sick leave policy prior to the effective date of the act.

In all of the foregoing instances, employers should seek guidance from their employment law counsel in crafting compliant paid time off policies best suited to meet the requirements of this new law and the Company’s operational objectives. We here at the Lindabury law firm are always available to assist you in meeting your legal requirements as a New Jersey employer.

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