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New Jersey Passes Statewide Earned Sick Leave Act

May 11, 2018

On May 2, 2018, New Jersey Governor Phil Murphy signed into law the New Jersey Paid Sick Leave Act. Beginning on October 29, 2018, employees throughout New Jersey will accrue up to 40 hours of paid sick leave each year to care for themselves and certain family members. The Paid Sick Leave Act will replace any sick leave ordinance passed by any New Jersey county or municipality, such as those in Bloomfield, East Orange, Elizabeth, Irvington, Jersey City, Montclair, Morristown, Newark, New Brunswick, Passaic, Paterson, Plainfield and Trenton.

Who does the law apply to?

The law applies to almost every employer with employees in New Jersey, regardless of size, and to all employees, including part-time or temporary employees. The law does specifically exempt from coverage construction industry employees working under a collective bargaining agreement and per diem hospital employees. For other industries, if employees are currently covered by a collective bargaining agreement the law will not apply to those employees until the agreement expires. Employees can waive the provisions of the law in subsequent collective bargaining agreements.

What does the law require?

Employees will accrue one hour of paid sick leave for every 30 hours worked, up to a maximum of 40 hours per benefit year. An employer can set the benefit year as a calendar year or any consecutive 12-month period. Paid sick time must be at the same pay, and with the same benefits, as the employer routinely pays the employee.

Current employees will begin to accrue paid sick leave on October 29, 2018, the date the law goes into effect, and may begin to use that accrued sick leave 120 days later, beginning on February 26, 2019. Employees hired after October 29, 2018 begin to accrue paid sick leave as of the date they are hired but cannot use any accrued sick leave until they have been on the job for 120 calendar days.

An employer can also “front load” sick leave, rather than requiring leave to be accrued, by providing employees with 40 hours of paid sick leave on the first day of the benefit year.

Employees must be allowed to carry over any sick leave accrued but not used from one year to the next, but employees cannot accrue or use more than 40 hours of paid sick leave per year.

An employer may choose, but is not required, to offer to pay employees for unused leave at the end of a benefit year, in order to limit the amount carried over to the next year. When an employer uses the accrual method, the employer may offer to pay employees for their unused accrued sick time in the final month of the benefit year. If employees agree to receive the payment, they may choose (1) a payment for the full amount of their unused accrued sick time or (2) a payment for 50 percent of such time. If the employer “front loads” sick leave (e.g., provides all 40 hours at the beginning of the year) the employer must determine whether to either pay the employee for the full amount of unused accrued sick time in the final month of the employer's benefit year or carry forward any unused sick time to the next benefit year, but employers do not have to offer employees a choice between payment or carry-over.

Employers are not required to pay out sick leave upon termination, resignation, retirement or other separation, unless the employer agreed to such payment through their policies or in a collective bargaining agreement.

If an employee is separated from employment and is re-hired or reinstated within six (6) months, the employee must be credited with his/her previously unused accrued leave.

Employers who already provide at least 40 hours of paid time off per year, such as vacation, personal leave or sick days, do not have to offer additional paid sick leave to comply with the new law as long as employees accrue that paid time off at a rate at least equivalent to the rate provided under the new law, or at a faster rate, and the paid time off can be used for the same purposes and in the same manner as leave under the new Paid Sick Leave Act.

What can the paid leave be used for?

Paid sick leave may be used for the following reasons:

An employer and employee can agree that, instead of using earned sick time, the employee will work additional hours or shifts during the same pay period or the next pay period to make up for the hours missed. This arrangement must be of the employee’s own initiative and an employer cannot require an employee to do this. Employers also cannot require an employee to find a replacement to cover the employee’s absence.

An employer may decide the increments by which employees may use paid sick leave but an employer cannot require an employee to use more hours of sick leave than the employee was scheduled to work in their shift. For example, employers may allow employees to use sick leave in four-hour increments, but if an employee’s shift is seven hours, an employer cannot require employees to use sick leave in eight-hour increments.

Does the law require employees to provide advanced notice or medical notes?

An employer can require employees to provide not more than seven days’ advanced notice of their need for sick leave if the leave is foreseeable. If the leave is not foreseeable, an employer can require the employee to provide notice as soon as possible.

Employers may only ask for reasonable documentation, such as a note from an employee’s health care provider, after an employee has been absent for three or more consecutive days.

Other Employer Requirements

Employers are required to retain records documenting an employee’s accrual of paid sick time for five (5) years and the records must be made available for inspection upon request by the Department of Labor and Workforce Development, which will administer the law. If an employer does not keep records or does not provide access to the records and an employee brings a claim, it will be presumed that the employer failed to provide the employee earned sick time.

Employers will also be required to prominently post a notice, to be provided by the Commissioner of Labor and Workforce Development, in a place accessible to all employees to advise employees of their rights under the Paid Sick Leave Act. Employers must also provide employees with copies of the notice within 30 days after the Commissioner issues the notice. New employees must be given a copy of the notice when they are hired.

What does the law prohibit?

The Paid Sick Leave Act prohibits employers from taking any retaliatory action against employees for using sick time or reporting violations of the Paid Sick Leave Act.

Employers also cannot count sick leave earned under the law as an absence that results in discipline, discharge, demotion, suspension, a loss or reduction of pay, or any other adverse action. Under the Act, there will be a presumption that an adverse action against an employee is retaliatory if it takes place within 90 days of the employee exercising his or her rights under the Paid Sick Leave Act.

What are the remedies for a violation?

The Paid Sick Leave Act imposes the same penalties as those imposed for other wage and hour violations. Employees will be able to file an action in court for violations of the Paid Sick Leave Act. Remedies include lost wages, reinstatement, liquidated damages in an amount equal to actual damages (i.e., wages multiplied by two) and attorneys’ fees, as well as fines. “Willful” violations, when an employer is found to have intentionally disregarded the law or acted with indifference can result in additional fines or imprisonment of between 10 and 100 days.

Next Steps

Employers should review their policies to determine if they already provide paid time off that satisfies the requirements of the Paid Sick Leave Act. Employers should also begin planning how they will track and document employees’ accrual of sick leave, or whether to “front load” 40 hours of paid sick leave at the beginning of the year, and how they will notify employees of their available paid sick time. Employers must be prepared to start documenting accrual of leave as of October 29, 2018. Employers should also review any policies, contracts or employee handbooks to ensure they comply with the new law.

The Commissioner of Labor and Workforce Development will also adopt rules and regulations to effectuate the new law. We will report on any new developments here.

If you have any questions regarding the provisions of the New Jersey Paid Sick Leave Act, or would like assistance in drafting or revising policies, please do not hesitate to contact one of our attorneys.