On May 2, 2018, the New Jersey Paid Sick Leave Act was signed into law by Governor Phil Murphy.  That Act, which requires all employers to provide paid sick leave to their employees (with some exceptions), is scheduled to go into effect on October 29, 2018.  A summary of the Act’s requirements and obligations is provided below:

Purpose of Leave: The employee may use paid sick leave for the following reasons:

• Diagnosis, care or treatment of—or recovery from—an employee’s own mental or physical illness, injury, or adverse health condition, including preventive medical care.
• Aid or care for a family member during diagnosis, care or treatment of—or recovery from—the family member’s mental or physical illness, injury, or adverse health condition, including preventive medical care.
• Circumstances related to an employee’s or their family member’s status as a victim of domestic or sexual violence (including the need to obtain related medical treatment, seek counseling, relocate, or participate in related legal services).
• Closure of an employee’s workplace or of a school/childcare of an employee’s child because of a public official’s order relating to a public health emergency, or a public official’s determination that the employee or the employee’s family member would jeopardize the health of others.
• Time to attend a meeting requested or required by school staff, or to attend a meeting regarding a child’s health condition or disability.

Which Employers Are Covered: All New Jersey employers, irrespective of size, are covered by this Act, including temporary help service firms.  The Act specifically excludes public employers who are already required to provide sick leave to their employees.

Which Employees Are Covered: The Act applies to most employees working in New Jersey “for compensation.”  It does not apply to employees in the construction industry employed under a collective bargaining agreement, per diem healthcare employees, or public employees who already receive sick leave benefits.

Which Family Members Are Covered:  The definition of a “family member” under the Act is broad, including “child, grandchild, sibling, spouse, domestic partner, civil union partner, parent, or grandparent of an employee, or a spouse, domestic partner, or civil union partner of a parent or grandparent of the employee, or a sibling of a spouse, domestic partner, or civil union partner of the employee, or any other individual related by blood to the employee or whose close association with the employee is the equivalent of a family relationship.”

Accrual of Leave:  The Act requires that employers designate any consecutive, 12-month period as a “benefit year.”  Current employees begin accruing sick time on the effective date of the Act (i.e., October 29, 2018).  Employees hired after that date begin to accrue sick time on the first date of their employment.  In each benefit year, employees can accrue one hour of earned sick leave for every 30 hours worked.  Alternatively, the employer may provide its employees with the “full complement” of earned sick leave (i.e., no less than 40 hours of leave) on the first day of the benefit year.  However the leave is provided, employers may limit the accrual of earned sick leave to 40 hours per benefit year.

Use of Leave: Employers may choose the increments in which earned sick leave can be used.  However, employers may not choose an increment that is larger than the number of hours an employee was scheduled to work in a given shift.  Employees may begin using sick leave 120 days after the Act becomes effective (i.e., February 26, 2019), or 120 days after their employment begins, whichever is later.  Employers need not permit employees to use more than 40 hours of sick leave in a benefit year.

Carryover or Payout of Leave:  Employers may offer to pay employees who accrue sick leave for their unused, accrued leave at the end of the benefit year.  Those employees can choose to either accept the payment or carry over their unused sick time to the next benefit year.  If the employer “frontloads” the entire amount of sick leave, and offers to pay out employees for their unused leave at the end of the year, the employees must accept the payment.  Under no circumstances are employers required to permit employees to carry over more than 40 hours of sick leave from one benefit year to the next.  

Termination: Unless an employer’s policy or collective bargaining agreement provides otherwise, employees are not entitled to payment for unused sick time upon separation from employment.

Notice of Leave: If the employee’s need to use earned sick leave is foreseeable, the employer may require that the employee provide no more than 7-days’ notice of the intention to use leave and the expected duration.  Employees are obligated to make a reasonable effort to schedule sick leave in a manner that is not disruptive to the employer’s operations.  Employers may prevent employees from using foreseeable leave on certain dates, and require that an employee provide reasonable documentation if sick leave that is not foreseeable is used on those dates.

If the employee’s need for leave is not foreseeable, the employer may require that the employee provide notice of his or her need to use leave as soon as practicable.

If an employee is absent for 3 or more consecutive days, the employer may require reasonable documentation verifying the need for sick leave.

Employer’s Recordkeeping and Notice Requirements: Employers are obligated to maintain records documenting the number of hours worked and the amount of sick leave taken by employees for a 5-year period.  The failure to maintain these records will result in the presumption that the sick leave was not provided, unless clear and convincing evidence demonstrates otherwise.

Employers are also obligated to notify employees of their rights under the Act, including the amount of paid sick leave available, the terms of its use, and the remedies for a violation of the law.  The required notice, issued by the State Department of Labor, must be posted conspicuously in the workplace and be accessible to all employees.  Additionally, employers must provide employees with a written copy of the notice (1) by November 3, 2018; (2) at the time of hiring, if the employee is hired after that date; and (3) at any time that the employee requests.

Prohibited Actions and Enforcement: Employers may not discriminate or retaliate against any employee who takes sick leave under the Act.  Additionally, an employer cannot consider sick leave taken by an employee as an “absence” for purposes of discipline or any other adverse employment action.  An employer can, however, discipline any employee who uses earned sick leave for purposes other than that allowed by the Act.

The Act provides a rebuttable presumption that an employer has retaliated against an employee if the employer takes an adverse employment action against the employee within 90 days of the employee engaging in protected activity under the Act.  Such protected activity includes filing a complaint with a government agency or court, informing another person of the employer’s alleged violation of the Act, cooperating with an investigation, opposing a policy or practice that is illegal under the Act, and informing another person of his or her rights under the Act.

Employees may sue their employers for violating the Act and can seek actual damages suffered as a result of the violation, plus an equal amount of liquidated damages.

Employer’s Existing Policy: Employers that already offer paid time off (PTO), personal days, vacation days, or sick days can continue to use those policies so long as employees can use that time off for the purposes provided by the Act and the policies otherwise comply with the requirements of the Act.

What New Jersey Employers Should Do: New Jersey employers should plan to review any existing sick leave or PTO policies to ensure that they comply with the requirements of this new law.  If the employer does not yet provide such leave to its employees, it should develop the appropriate sick leave policies and procedures in order to comply with the law.  Employee handbooks should also be revised as appropriate to account for these changes.  Additionally, employers should obtain from the New Jersey Department of Labor and Workforce Development a copy of the notice that must be posted and distributed to all employees.

Finally, the New Jersey Department of Labor and Workforce Development recently issued proposed regulations that complement the Act.  A public hearing on the proposed regulations is scheduled to occur on November 13, 2018.  We will provide an additional update if and when those regulations become effective.