What You Need to Know About New Jersey’s Newest Employer Mandate—Paid Sick Leave

Today Governor Phil Murphy signaled his on-going intent to significantly change the labor and employment landscape in New Jersey by signing the paid sick leave bill into law.

Let’s start with the good news.  For employers in one of the thirteen municipalities with sick leave mandates, this law, which goes into effect on October 29, 2018, preempts those requirements, providing uniformity in this area.  In addition, the law expressly authorizes unions to waive the rights and benefits of this law during negotiations of a collective bargaining agreement.

Now onto the bad news.  This law creates a new mandate that is likely to have at least a minimal impact on almost every business in the State.  While many employers in New Jersey already provide their employees with paid sick leave or other paid time off, this law applies to all private employers in New Jersey, regardless of size and industry, including temp agencies.  Failure to comply with the law will be met with severe penalties and fees (the Wage and Hour Law kind).

Under the new law, all private employers will be required to provide covered employees with at least one hour of fully-paid sick leave (or other paid time off) for every 30 hours worked, for up to 40 hours of leave per designated benefit year.  While employers are required to allow employees to accrue the time upon hire, employers can prohibit employees from using the time until they have been working for 120 days.  For many seasonal employees, this means that while they may accrue the time, their employer may not have to allow them to use it.  Be aware, however, that if a prior employee returns to your company within six months of leaving, her prior employment counts toward the 120 days and anytime she previously accrued must be reinstated.

What Employees Are Covered?

This law covers all employees except three types: (1) certain construction employees covered under a collective bargaining agreement; (2) certain per diem health care employees; and (3) public employees who are provided paid sick leave under state law.

For What Can an Employee Use the Time?

Under the Act, employee must be permitted to use sick leave benefits for the following reasons:

• Diagnosis, care, or treatment of, or recovery from their or a family member’s mental or physical illness, injury, or other adverse health condition, including preventative medical care;
• Absence due to the employee’s or family member’s status as a victim of domestic or sexual violation, if the leave is to obtain medical attention, services from a designated agency, counseling, relocation, or legal services;
• When the employer’s workplace or the employee’s child’s school or childcare is closed by order of a public official due to an epidemic or other public health emergency;
• When there is a public health determination that the employee’s or family member’s presence in the community would jeopardize the health of others; and
• When the employee needs to attend a child’s school related conference, meeting, or function.

Importantly, “family member” is broadly defined to include “any individual related by blood to the employee or whose close association with the employee is the equivalent of a family relationship.”

Can I Place Any Limitations on My Employee’s Use of Sick Leave?

Yes.  The law does allow for some limitations.  However, employers should be careful to ensure that all policies and practice are consistent with the limitations in the law.  Some of the available limitations, include:

• Employers can require up to seven days’ notice before using leave for a foreseeable reason;
• Employers can require “reasonable” documentation, examples of which are in the law, for three or more consecutive days of leave;
• Employers can prohibit employees from using foreseeable leave on designated days and can require documentation for unforeseeable leave on the same days.

What Happens at the End of the Benefit Year?

That depends.  If you provide your employees all their leave at the beginning of the benefit year, you can choose to pay them out on their unused time or allow them to rollover their unused time.  If, instead, your employees have to earn or accrue their leave, the employee is entitled to carry the time over.  The employer can offer payment in lieu of carryover, but the ultimate choice is with the employees: they can choose to carry over the time, to be paid out on all their remaining leave (if offered), or to be paid out on 50% of their leave and rollover the rest.

Remember, even if you provide your employees with a more generous benefit, you only have to allow them to carry over up to 40 hours.  Also, you do not have to pay your employees out when they separate from employment.

Recordkeeping and Other Notification Requirements

Employers are required to keep records related to sick leave for five years.

Employers must also post notice of the law and provide a written copy to all employees: (1) 30 days after the form of the notice is provided by the Commissioner of Labor; (2) at an employee’s hiring; and (3) when requested by an employee.

Additional Provisions

An employer cannot retaliate against an employee for requesting to use sick leave, using sick leave, or filing a complaint with the Department of Labor about a violation of the law.  Employers also cannot reduce their current benefits or rights available to employees to comply with the law.  This law sets a floor, not a ceiling.  If your company is willing and able, you are more than entitled to offer whatever leave benefits you would like to your employees.

While this overview outlines some of the biggest elements of this new law, there are a number of additional provisions that will impact businesses throughout the State.  Our firm is available to discuss how the new law will impact your company and how to prepare for the law to become effective, including updating employer handbooks and policies.  It is clear that a lot of changes are coming to New Jersey in the areas of labor and employment law and proper preparation will be key to avoiding unnecessary liability.