New Jersey Joins the Earned Sick Leave Party (article)

On May 2, 2018, Governor Phil Murphy signed a law (A1827) that requires employers to provide earned sick leave to their employees who work in New Jersey.  The law takes effect on October 29, 2018.

Two important notes about this law:

  • First, this law applies to employers without regard to size.  It provides benefits to any employee working in New Jersey without regard to employment status, i.e., both full-time and part-time employees are eligible for the benefit.
  • Secondly, this new state-wide law supersedes the existing earned sick leave ordinances enacted by 13 New Jersey local jurisdictions, specifically, Bloomfield, East Orange, Elizabeth, Irvington, Jersey City, Montclair, Morristown, New Brunswick, Newark, Passaic, Paterson, Plainfield and Trenton.  Hopefully, future guidance will address coordination issues that may arise for leave accrued under one of these ordinances.  In addition, the law contains a provision that prohibits any other local city or municipality in the state from enacting a paid sick leave law.

Employers subject to the law.  Employer is defined as any person, firm, business, educational institution, nonprofit agency, corporation, limited liability company, or other entity who employs employees in the State of New Jersey, including a temporary help service firm.  Where a temporary help service firm places an employee with client firms, the earned sick leave is accrued on the basis of the total time worked on assignment with the temporary help service firm rather than separately for each client firm to which the employee is assigned.  Public employers who provide sick leave in accordance with another New Jersey law are exempt from this earned sick leave law.

Eligible employees.  An eligible employee is one who works for the employer for compensation.  Employees in the construction industry who are covered under a collective bargaining agreement and certain per diem health care workers are not eligible for the benefit.

Amount of paid sick leave.  An eligible employee is entitled to earn one hour of paid sick leave for every 30 hours worked.

Accrual, Frontloading, Carryover and Cap.  Employees begin to accrue earned sick leave on the effective date of the law (October 29, 2018).  Following the effective date of the law, individuals will begin to accrue leave on their date of hire.  An employee can begin using accrued earned sick leave 120 days following the date of hire; after 120 days, sick leave can be used as it is accrued.  Individuals with existing accrued leave prior to the enactment date of this law can continue to use it in accordance with the employer’s policy.

Accrued sick leave carries over from year-to-year, subject to a 40-hour per year limit. An employer can choose to provide paid sick leave on an accrual basis; or, the employer can front-load 40 hours of paid sick leave on the first day of each benefit year.  Regardless of the method, an employee may use up to 40 hours of sick leave per benefit year unless the employer provides a higher amount.  A benefit year refers to a regular and consecutive twelve month period, as determined by an employer. 

In lieu of a carryover, an employer has the option to pay-out unused earned sick leave in the last month of its benefit year.  If the employer opts to do this, then the employee must decide within 10 days of receiving the employer’s offer whether to accept or decline the pay-out.  If the employee agrees to receive a pay-out, then he/she can choose whether to receive the full amount of unused earned sick leave, or 50% of the amount of unused earned sick leave and then carry over the remaining balance of the 40 hours.  If the employee agrees to a payment for the full amount, then the employee is not entitled to carry-over any earned sick leave. 

An employee and employer may, by mutual agreement, arrange for the employee to work additional hours during the same pay period to avoid the use of and payment of earned sick leave.

If individual is terminated or otherwise separated from employment and returns to work within 6 months, then any unused accrued sick leave will be reinstated upon the re-hired date.

Use of paid sick leave.  Leave can be taken for the following reasons:

  • To attend to one’s own needs, or to attend to the needs of a family member, for the diagnosis or treatment of a physical or mental condition, including preventive care services.  For this purpose, family member includes:
    • A child, whether biological, adopted, foster or step, or a legal ward of an employee, a child of the employee’s domestic partner or civil union partner, or a grandchild;
    • A spouse, domestic partner, civil union partner;
    • A parent, whether biological, adoptive, foster or step; a legal guardian of an employee or his/her spouse, domestic partner, or civil union partner; or, a person who stood in loco parentis of the employee or his/her spouse, domestic partner, or civil union partner when he/she was a minor child;
    • A sibling or grandparent of the employee or of the employee’s spouse, domestic partner or civil union partner; or
    • Any other individual related by blood to the employee or whose close association with the employee is the equivalent of a family relationship.
  • To obtain psychological or physical services, or to attend to legal matters as a result of domestic or sexual violence.
  • Due to a closure of the employee’s worksite, or closure of his/her child’s school or childcare provider as a result of a declared public health emergency.
  • To attend a school-related conference, meeting, function or other event requested or required by a school administrator, teacher, or other professional staff member responsible for the child’s education, or to attend a meeting regarding care provided to the child in connection with the child’s health conditions or disability.

Coordination with employer’s existing PTO policy.  An employer who has a paid time off (PTO) policy that meets or exceeds the benefits as required above will be in compliance with this law.

Notice Requirements

  • Employee Notice Obligation.  When the need for leave is foreseeable, an employer may require up to a 7-day advanced notice of the leave together with the expected duration of the leave.  The employee may be required to make a reasonable effort to schedule the leave in a manner that would not unduly disrupt the operations of the employer.  When the need for leave is unforeseeable, the employee must notify the employer as soon as practicable.  For a leave of absence exceeding three or more consecutive days, an employer may require reasonable documentation to substantiate the need for the leave. 
  • Employer Notice Obligations.  An employer is required to provide written notification of the earned sick leave benefit to its employees upon hire, as well as upon request.  The notice must be provided in both English and Spanish, as well as in the primary language of the majority of the employer’s workforce.  In addition, the employer is required to post a notice of the provisions of the earned sick time benefit in a conspicuous place at its worksite locations. 

Record Retention.  Employers are required to retain records demonstrating compliance with the requirements of the law for a period of five years.

Prohibition of Retaliation.  An employer is generally prohibited from taking any adverse employment-related action or retaliation against employee’s right to use accrued paid sick leave.

Confidentiality Requirements.  Employers must keep medical information relating to an employee or his her family member confidential.  Such information can only be disclosed to the affected employee, or with his/her permission.

Enforcement Agency and Internet Resources.  The New Jersey Department of Labor and Workforce Development (LWD) (http://nj.gov/labor/) enforces the provisions of this law.  The LWD’s Commissioner is directed to implement a multilingual outreach program to inform employers, employees, parents, and health care providers about the availability of earned paid sick leave law.

The information contained in this article is provided as general guidance and may be affected by changes in law or regulation. This article is not intended to replace or substitute for accounting or other professional advice. Please consult a CBIZ professional. This information is provided as-is with no warranties of any kind. CBIZ shall not be liable for any damages whatsoever in connection with its use and assumes no obligation to inform the reader of any changes in laws or other factors that could affect the information contained herein. 

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