New Jersey passes paid sick leave law

On May 2, New Jersey became the 10^th state to pass a statewide paid sick leave law when Governor Phil Murphy signed Bill A-1827 into law. The new law comes into effect on Oct. 29, 2018 and will require all private New Jersey employers to provide up to 40 hours of paid sick leave to covered employees during an employer’s benefit year.

Accrual and frontloading

Under the new law, employers must allow employees to accrue one hour of paid sick leave for every 30 hours worked. Employers may choose instead to frontload 40 hours of leave at the beginning of each benefit year.

Once the law comes into effect, new employees are eligible to begin accruing leave as soon as they are hired. However, employers may require employees to work for at least 120 days before being allowed to use accrued paid sick leave.

Leave use

Employees will be able to use paid sick leave for their own qualifying reason or for that of most family members. Employers may require employees to provide documentation that reasonably demonstrates that leave is being used for a permitted purpose where an employee is absent for three or more consecutive dates.

Payout and carryover

When using leave, employees must be paid at the same rate of pay with the same benefits as the employee normally earns, but not less than their applicable minimum wage rate.

Employers must carry over up to 40 hours of unused, accrued sick leave per benefit year. Nevertheless, employers must, in some circumstances, give employees the option of being paid the full value of that accrued leave in lieu of carrying over those hours.

Notice

Where the need for leave is foreseeable, employers may require employees to provide up to seven calendar days’ notice and may prohibit leave use on specific dates. Notice must be provided as soon as possible where leave is not foreseeable. In communicating with employees, employers have several posting and notice requirements to adhere to under the law as well.

Alternative arrangements

Employers may agree to allow an employee to make up absences due to illness by working additional hours instead of using paid sick leave, but must not require employees to find a replacement as a condition of such an arrangement.

Separation and reinstatement

Employers do not need to pay out the value of unused paid sick leave when an employee quits their job or is let go. However, employers must reinstate any accrued paid sick leave as of the last day of employment for employees who are terminated and reinstated with the same employer within a period of six months.

What does this mean for employers?

An employer should first determine whether the new law applies to it by establishing whether it is a covered employer with covered employees. If the law does apply to the employer, the employer can then analyze whether it has an existing paid time off policy that sufficiently complies with the law.

Employers will want to make sure that their new or existing leave policies comply with New Jersey’s sick pay accrual/frontloading, use, payout, carryover, notice, record access and retention, and reinstatement requirements.

Failing to adhere to the requirements of New Jersey’s new paid sick law has the potential to open employers up to serious liability, namely because the law creates a private right of action that can expose employers to claims for failure to pay wages, actual damages suffered by an employee as the result of the violation, plus an equal amount of liquidated damages.

What happens next?

The new law replaces all 13 existing city-level sick leave laws in the state and bans cities from enacting their own sick leave laws. This may be welcome news for employers who have had to comply with numerous New Jersey sick leave laws in the past and the burden of juggling differing requirements depending on the city.

As is expected, the new sick leave law answers some common questions while creating new ones. We expect the New Jersey Commissioner of Labor and Workforce Development to issue administrative rules and other documentation clarifying the law soon.  In the meantime, everyone should keep an eye out for any developments.

Disclaimer: The information provided in this post is provided for informational purposes only and should not be relied upon or construed as legal advice and does not create an attorney-client relationship. You should review with your legal advisors how the laws identified in this post may apply to your specific situation.