Hunton Employment & Labor Perspectives

New Jersey’s Paid Sick Leave Act will go into effect on October 29, 2018, making it the tenth state plus Washington DC and dozens of localities to mandate paid sick leave.

New Jersey’s Act requires employers of all sizes to provide employees with up to 40 hours of paid leave per 12-month period.  Key aspects of the new law include:

• Coverage. The Act covers employers of all sizes, with exceptions for per diem healthcare employees, construction or other workers employed pursuant to a collective bargaining agreement, and public employees who already have sick leave benefits.  An employer may be considered “in compliance” with the new Act if it already provides paid time off that can be used in the same manner as provided in the Act.
• Accrual. An employer may “frontload” 40 hours of paid leave at the outset, or, must allow employees to accrue one hour of paid sick leave per 30 hours worked.  For employers without a paid leave policy in place, accrual begins from October 29, 2018.
• Usage. Employees may use a maximum of 40 accrued hours of paid leave per “benefit year.”  Employees must be paid the same rate of pay with the same benefits as “normally” earned.  An employer cannot require an employee to use paid sick leave for missed shifts or search for replacements for the period of sick leave.
• Usage restrictions. After 120 calendar days of employment, an employee becomes eligible to use accrued leave for a permissible purpose.  The employer may choose the increment in which employees use paid leave as long as the increment does not exceed the number of hours worked during the shift.
• Permissible purposes. Accrued sick leave can be used for the following reasons:
• Diagnosis, care, treatment of, or recovery from an employee’s mental or physical condition, or for preventive care for the employee;
• Diagnosis, care, or treatment of, or recovery from, a family member’s mental or physical condition, or preventive care for the family member;
• Employee or family member’s physical or psychological conditions caused by domestic or sexual violence, including time needed for recovery, counselling, relocation or participating in legal proceeding;
• Closure of the employee’s workplace or the school or place of care of a child due to public health emergencies, or a determination by public health authority that employee or employee’s family member has public health concerns;
• Time needed to attend meetings or other events at schools of an employee’s child, to discuss the child’s health conditions or disability.
• Rollover. Unused but accrued sick leave rolls over, but accrual, rollover,  and usage is still limited to 40 hours per benefit year.  An employer has the option of buying back 50% or 100% of an employee’s unused sick leave in the final month of the benefit year.  (Employers which “frontload” 40 hours of paid sick leave have the option to buy back 100% of unused sick leave time.)
• Employer rights. An employer may require up to 7 days’ advanced notice if an employee’s use of sick leave is foreseeable, and may prohibit employees from using sick leave on certain dates.  If the need for sick leave is unforeseeable, an employer may require notice as soon as practicable, as well as supporting documentation.  An employer may request documentation for leave of three or more consecutive days, and may discipline employees for improperly using earned sick leave.
• Notice and recordkeeping requirements. The Act requires employers to both post a notice regarding the Act and give a written copy of the notification to each employee within 30 days and/or at the time of hiring.  Employers must also retain records regarding the number of hours worked and the sick leave taken by employees for a period of five years.
• Remedies. The Act provides that a failure to provide paid sick leave shall be treated as a failure to pay wages.  An aggrieved employee may bring an action against the employer and seek actual and liquidated damages.

Analysis

 New Jersey’s Paid Sick Leave Act represents a continuing trend of state and local legislation mandating paid employment leave.  The Act preempts preexisting New Jersey paid leave laws passed on the local level.

New Jersey’s Act is more burdensome in some regards than other state laws because it does not have carve-outs for small employers and has a relatively short time period to the effective date.   The Act also uniformly requires up to 40 hours of paid sick leave, regardless of employer size or whether employees are full or part-time.

New Jersey’s Act leaves ample discretion to the employer, such as selecting the benefit year and usage increment, providing for optional buyback, and allowing a “frontloading” option in lieu of an hour-based accrual method.  These are aspects that New Jersey employers should consider and clarify in written paid leave policies.

More states and cities are likely to continue the paid leave legislative trend. New Jersey’s Act was undoubtedly buoyed, and even accelerated, by the numerous New Jersey cities and counties that had passed their own paid sick leave laws beginning in 2013.  Moving forward, employers are advised stay apprised of future legislative changes updates.