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What NJ Employers Need to Know About Paid Sick Leave Regulations

Author: John G. Geppert, Jr.

Date: October 4, 2018

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New Jersey’s Paid Sick Leave Law is Slated to Take Effect on October 29, 2018…

New Jersey’s paid sick leave law is slated to take effect on October 29, 2018. In preparation, the New Jersey Department of Labor and Workforce Development (NJDOL) recently published regulations to implement the new law.

What NJ Employers Need to Know About Paid Sick Leave Regulations
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New Jersey Paid Sick Leave Law

On May 2, New Jersey became the 10th state in the country with a paid sick leave law. Under the Earned Sick and Safe Days Act (Act), workers are entitled to at least five sick days a year, earning one hour of paid sick time for every 30 hours worked. Employers must pay workers for earned sick leave at the same rate of pay, and with the same benefits, as they normally earn.

As discussed in greater detail in a prior article, the paid sick leave law excludes per diem healthcare workers and construction workers covered by a collective bargaining agreement (CBA). In addition, it does not apply to non-construction employees covered by a CBA that is effective when the law goes into effect. However, it will apply at the expiration of the CBA. Employees and their representatives may waive the rights available under the law and address paid leave in collective bargaining. The law also excludes a public employee who is provided with sick leave at full pay pursuant to another New Jersey law or regulation.

Under the new sick leave law, workers may use paid leave for their own qualifying need or for that of a family member. The term “family member” is defined broadly to include children, grandchildren, siblings, spouses, domestic partners, civil union partners, parents, and grandparents, as well as any individual “whose close association with the employee is the equivalent of a family relationship.” The Act entitled employees to use earned sick leave in the following situations:

  • For diagnosis, care, treatment, or recovery related to the employee’s illness;
  • To care for a family member during diagnosis, care, treatment, or recovery related to the family member’s illness;
  • For certain absences resulting from the employee or a family member being a victim of domestic or sexual violence;
  • For time during which the employee is not able to work because of a closure of the employee’s workplace, or the school or place of care of a child of the employee, in connection with a public health emergency or a determination that the presence of the employee or child in the community would jeopardize the health of others; or
  • To attend school-related conferences, meetings, or events, or to attend other meetings regarding care for the employee’s child.

Employees may use their earned sick leave beginning on the 120th day after employment starts unless the employer agrees to an earlier date. The employee may subsequently use earned sick leave as soon as it is accrued. Employers are not required to allow workers to accrue or use more than 40 hours of earned sick leave per benefit year. Accrual will start on the effective date of the law for employees who commenced employment prior to the effective date of the law. For new employees, sick leave begins to accrue when employment commences.

NJDOL’s Proposed Sick Leave Regulations

On September 13, 2018, the NJDOL published regulations to implement New Jersey’s new paid sick leave law. The regulations cover numerous provisions of the Act, including the accrual, advancing, use, payment, payout, and carry-over of earned sick leave. The regulations also address violations of the Act, administrative penalties and fees, recordkeeping, employee notification of their rights under the Act, the method for determining independent contractor status under the Act, and the process for filing a complaint alleging a violation of the Act.

Below is a brief summary of several key aspects of the regulations:

  • Existing PTO Policies: For employers that already have paid time off (PTO) policies, the regulations confirm that you will be compliance with the Act, so long as the PTO meets or exceeds all of the requirements in the Act and employees are permitted to use all of the PTO for any of the purposes set in the Act. The regulations highlight that existing PTO policies must meet or exceed the following requirements of the Act: accrual and advancing, use, payment, payout and carry-over.
  • Accrual for Exempt Employees: Where the employer does not record hours worked for a particular employee because the employee is an exempt employee under either the Federal Fair Labor Standards Act or the New Jersey Wage and Hour Law, the employer may either: record the actual hours worked for that employee for the purpose of calculating earned sick leave accrual; or presume, “solely for the purpose of calculating earned sick leave accrual,” that the employee works 40 hours per week.
  • Recordkeeping: Employers must retain for a period of five years, all records documenting hours worked by employees and earned sick leave accrued/advanced, used, paid, and paid out and carried over by/to employees. However, they are not required to maintain (or retain) records documenting hours worked with regard to exempt employees for whom the employer either advances earned sick leave or the employer chooses to presume solely for the purpose of calculating earned sick leave accrual that the employee works 40 hours per week.
  • Independent Contractors: Employers should use the criteria identified in the Unemployment Compensation Law, commonly referred to as the “ABC test,” and the case law interpreting and applying the ABC test, to determine whether an individual is an employee or an independent contractor under the Act.
  • Accrual Dates: For an employee who commences employment on or before October 29, 2018, earned sick leave should begin to accrue no later than October 29, 2018. For an employee who commences employment after October 29, 2018, earned sick leave must begin to accrue on the date that the employment commences.
  • Benefit Year: Employers must establish a single benefit year for all employees. Should an employer seek to change the benefit year, the employer must provide notice to the Commissioner of the NYDOL at least 30 calendar days prior to the proposed change.
  • Foreseeable Leave: The Act provides that where the employee’s need to use earned sick leave is foreseeable, the employer may require advance notice, not to exceed seven calendar days prior to the date the leave is to begin, of the employee’s intention to use the leave and its expected duration. The regulations clarify that the need to use earned sick leave will be considered “foreseeable” when the employee is able to predict or know in advance that he or she will need to use earned sick leave, such as a scheduled doctor’s visit, a regularly occurring medical treatment, or regularly scheduled therapy appointment. The regulations further advise that an example of a need to use earned sick leave that is “not foreseeable,” is when an employee wakes up in the morning with a fever and does not feel well enough to report for work that morning.
  • Blackout Dates: The Act also provides that where the employee’s need to use earned sick leave is foreseeable, the employer may prohibit the employee from using earned sick leave on certain dates. Under the proposed regulations, the “certain dates” on which the employer may prohibit employees from using foreseeable earned sick leave shall be limited to “verifiable high-volume periods or special events, during which permitting the use of foreseeable earned sick leave would unduly disrupt the operations of the employer.” According to the NYDOL, an example of a high-volume period would be, for an airline industry employer, the period during which they experience a predictable increase in customer activity (flying) in and around a particular holiday, such as Thanksgiving. Meanwhile, an example of a special event would be, for a manufacturer of retail products, the day or week during which it is making a new product available for the first time ( a product launch).

Next Steps for NJ Employers

A public hearing on the proposed new rules will be held on November 13, 2018, at the NYDOL headquarters in Trenton. The agency will also accept written comments on the proposed regulations until December 14, 2018, after which it may publish its final regulations.

With the compliance deadline of October 29, 2018, quickly approaching, employers should be preparing now, if they have not done so already. While many New Jersey businesses already offer paid leave, the new sick leave law imposes specific obligations in terms of coverage, allowable reasons for leave, and record keeping. Given the complexity of the law and the penalties for noncompliance, we encourage all employers to discuss the new law with experienced counsel. For assistance, contact a member of the Scarinci Hollenbeck Labor & Employment Group.

If you have questions, please contact us

If you have any questions or if you would like to discuss the matter further, please contact me, John G. Geppert, or the Scarinci Hollenbeck attorney with whom you work, at 201-806-3364.

No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.

Scarinci Hollenbeck, LLC, LLC

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