United States: New Jersey Employers: The State Paid Sick Leave Law Is Now In Effect – Are You Ready?

Last Updated: November 5 2018
Article by Sherri A. Affrunti

The New Jersey Paid Sick Leave Act takes effect today, October 29, 2018. Just in time for flu season.

If you are a New Jersey employer or an employer with employees in New Jersey, regardless of size or employee number, you are now required by law to provide one hour of sick leave for every 30 hours worked – up to 40 hours in a benefit year – to all employees (including part-time and seasonal) with the minor exceptions of: (i) per diem health care employees, (ii) construction workers employed under a collective bargaining agreement (who will later begin to accrue sick leave under the law on the date the agreement expires), and (iii) public employees previously entitled to sick leave benefits under state law.

Sick leave under the law begins to accrue on the law's effective date (October 29th), or upon an employee's later date of hire, and may begin to be used 120 days after an employee's start of employment (or upon such earlier date that an employer permits). Leave granted under the law may be advanced in whole, or be subject to accrual.

The state law preempts the various municipal laws previously in effect. Employers who provide paid time off (PTO) banks are compliant with the Act provided the PTO may be used for the purposes and in the manner set forth under the state law and is accrued at a rate equal to or greater than the rate provided by the law.

An employer may choose the increments in which an employee may use earned sick leave, provided that the largest increment required does not exceed the number of hours an employee is scheduled to work for that shift (including any overtime). Acceptable reasons for using paid sick leave include: (i) for preventative care or the diagnosis, care, treatment or recovery of an employee's own mental or physical illness, injury or health condition, or that of their family member; (ii) treatment, counseling or preparation for legal proceedings necessary following domestic or sexual violence to an employee or their family member; (iii) an employee's need to attend school-related conferences, meetings or events regarding their child's education, or to attend a school-related meeting concerning their child's health; or (iv) an employee's time off upon the employer's closing, or the closing of their child's school or child care provider, due to a public health emergency.

For purposes of the law, "family members" include an employee's: (a) husband, wife, or domestic or civil union partner; (b) own biological, adopted, or foster child, step child, legal ward, or the child of their domestic or civil union partner; (c) grandchild; (d) sibling, or sibling of their spouse or domestic or civil union partner; (e) own parent (whether biological, adoptive, stepparent, or foster, legal guardian, or person standing in loco parentis), or the parent of their husband, wife, or domestic or civil union partner; (f) own grandparent, or the grandparent of their husband, wife or domestic or civil union partner; (g) other blood relatives; or (h) individuals whose close association to them is the equivalent of family.

Scheduling of earned sick leave may only be required in advance if the need for the leave is foreseeable – and in those limited instances, an employer may (x) require 7 days' advance notice of the need and duration of the leave, (y) request reasonable efforts be undertaken to schedule the leave in a manner that does not disrupt the employer's business operations, and (z) prohibit use of sick leave on certain dates (the "black-out dates"). Where the need to use sick leave is unforeseeable, an employer may only require the advance notice that is practicable. Reasonable documentation of the leave associated with an employee's own or family member's health may be requested only if the use of earned leave for is for three or more consecutive days or arises on an employer's black-out dates; however, health care providers are not required by the law to specify the medical reason for the leave (stating the need for sick leave and, if possible, the duration is sufficient). The statute specifies a variety of other documentation that shall be deemed "reasonable" to support a sick leave request for non-health care reasons, including but not limited to court orders, documentation of a sexual offense or violence, law enforcement records or reports, or orders from public officials.

At the end of the benefit year, employers who advance sick leave for the next benefit year on the first day of that year must either provide payment for the full amount of any unused earned sick leave remaining in the prior year or carry the remaining time over into the next benefit year. If employees carry over the earned time, the employer is only required to let the employee use 40 hours of leave per benefit year, and is not required to pay out the earned, unused leave at termination of employment unless an employer policy or collective bargaining agreement provides for such a payment. Rights to sick time survives inter-company transfers, separation of an employee followed by reinstatement within 6 months, and acquisitions by successor organizations. Employers must maintain documentation of employee hours worked and sick leave earnings and usage for a period of 5 years. Supporting records of the need for leave must be maintained confidentially, with restricted access.

The law contains penalties – including double liquidated damages and potential criminal sanctions – for non-compliance with its requirements and for retaliation against employees who request and use earned sick leave, communicate with others concerning the law, file a complaint, or participate in an investigation for alleged violations of the law. The law provides for a private right of action and includes a rebuttable presumption of retaliation for adverse employment actions taken with 90 days of an employee's protected activities under the Act.

The New Jersey Department of Labor & Workforce Development (NJDOL or Department) recently published a "Notice of Employee Rights" which employers must now provide to employees on (1) the start date of their employment and (2) upon request. Existing employees must also receive a copy of the Notice, and the Notice must be posted in an accessible location for employees (which may be an electronic portal), by November 29, 2018. Notices should be posted and otherwise provided to employees in English, Spanish or other language that is a first language for a majority of the employer's workforce. If you have not yet posted the Notice and distributed to your employees, you should do so now. A link to the English version of the Notice is attached here. The NJDOL expects to publish the Notice in ten additional languages.

The NJDOL will undertake efforts to educate covered individuals about their rights under the law, but the Department's actions will not relieve an employer of its notice obligations. The Department has also endeavored to provide printed guidance for employees and employers to reference in its "New Jersey Earned Sick Leave FAQs" published just days ago. A copy of the FAQs is attached here.

The NJDOL additionally published proposed regulations for the sick leave law last month. Succinctly stated, the proposed regulations:

  1. make clear that employees are not eligible to use earned sick leave until 120 days after the law's enactment (February 26, 2019), or 120 days after the start of their employment, whichever date is later (although note that accrual begins on the law's enactment date);
  2. expand upon the potential substitution of PTO for sick leave banks, stating that a PTO policy must meet or exceed all requirements of the law relating to accrual rate, permitted use, payment rate, and carryover or payment for earned unused time;
  3. clarify that, absent express approval of the Department, employers are required to establish a single "benefit year" for all employees and cannot use an "anniversary year" as the designated benefit year;
  4. limit permissible employer black-out dates for sick leave to "verifiable high volume periods or special events" where permitting the use of foreseeable earned sick leave would "unduly disrupt" the employer's operations;
  5. define methods for determining the rate of pay for employees who take sick leave and work at two or more rates, earn commissions, are paid on a piecework basis, or whose earnings include gratuities, food or lodging;
  6. provide that discretionary bonuses and overtime premiums do not need to be included in the calculation of the payrate;
  7. state that employer records must include documentation of hours worked, sick leave accrued or advanced, sick leave used, amounts paid for sick leave, and amounts paid out or carried over at benefit year-ends;
  8. establish that employees may not be subject to points or demerits for sick leave under employer "no fault" attendance policies;
  9. state that the "ABC test" will be used to confirm independent contractor status exempt from the Act; and
  10. set forth the penalties for violations of the law.

A public hearing on the proposed regulations is scheduled for November 13, 2018 before the Department, and the foregoing draft rules may change following public comment. A copy of the proposed regulations may be found here.

Although we await the final regulations, in addition to distributing the Notice, New Jersey employers should assure that they have updated sick leave or PTO policies in place which provide at least the equivalent rights and benefit stated in the law. They should also train managers on the requirements of the new law and the expanded employee rights the law provides (including on the permissible uses for sick leave, limited notices, and documentation provisions).

We will continue to track the proposed regulations and keep employers abreast of further developments, including the substance and implementation date for the final rules.

This article is presented for informational purposes only and is not intended to constitute legal advice.

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