Employers with operations in New Jersey will need to be ready next Monday, October 29, when the New Jersey Earned Sick Leave Law takes effect. The state Commission of Labor and Workforce Development issued proposed regulations in September and are accepting comments until December 14. But the lack of final regulations won’t stop the law from taking effect as scheduled.
Here are the key provisions of the law.
Coverage. The law applies to virtually all employers with employees in New Jersey, regardless of size, with some very limited exceptions. It also applies to virtually all employees who work in New Jersey.
The exceptions to coverage are (1) employees in the construction industry who are under a collective bargaining agreement, (2) per diem health care employees, and (3) public employees with sick leave at full pay under any law or rule of New Jersey.
Amount of leave available. Starting October 29, employees in New Jersey will accrue 1 hour of earned sick leave for every 30 hours worked, up to a maximum of 40 hours in a “benefit year.” If the employer prefers, it can “front-load” all 40 hours of leave at the beginning of the benefit year. Employees may carry over a maximum of 40 hours of leave into a subsequent benefit year.
Accrual begins for current employees on October 29. If the employees already have paid leave available under another program, they do not forfeit that leave. For employees hired after October 29, accrual begins when employment begins. Under the proposed regulations, current employees would not be allowed to use their earned sick leave until 120 calendar days after the effective date of the law (February 26, 2019). However, they could use paid leave accrued under other employer policies. Employees hired after October 29 can begin using their earned sick leave 120 calendar days after employment begins.
The dollar amount of earned sick leave must be the same as the employee’s regular rate of pay. Under the proposed regulations, the employer is not obligated to pay overtime rates if the time off includes what would have been overtime.
Under the proposed regulations, if the employee is exempt from overtime under the federal Fair Labor Standards Act, the employer can either track the employee’s actual hours of work or assume that the employee works 40 hours a week. (If the employer “front-loads” the leave at the beginning of the benefit year, then tracking time worked is not an issue.)
Benefit year. The “benefit year” is a 12-month period chosen by the employer. However, once the benefit year is selected, the employer cannot change it without getting prior approval from the Commissioner of Labor and Workforce Development. It is a violation of the law for the employer to change the benefit year in an attempt to deprive employees of their rights. The proposed regulations would require that 30 days’ notice be given to the Commissioner before an employer can change its benefit year, and the proposed regulations also specify the information that employers should provide to the Commissioner.
Qualifying reasons for earned leave. Employees can take earned leave for the following reasons:
A mental or physical illness, injury, “adverse health condition,” or treatment for any of these, or preventive medical care for the employee.
A mental or physical illness, injury, “adverse health condition,” or treatment for any of these, or preventive medical care for the employee’s family member.
Domestic or sexual violence where the victim is the employee or the employee’s family member. This includes medical care, services of a domestic violence agency or victim services organization, counseling, relocation, and legal services.
Closure of the employee’s workplace or the school of the employee’s child for an epidemic or other public health emergency, or a determination by a public health official that the employee or family member would jeopardize the health of others.
School conferences, defined broadly, for the employee’s child.
“Family Member.” A “family member” under the law includes the employee’s children (biological, adopted, foster, stepchildren, legal wards) and the child of the employee’s domestic or civil union partner. Other covered family members are grandchildren, siblings, spouses, domestic or civil union partners, parents, and grandparents of the employee. Siblings of spouses, or domestic or civil union partners, of the employee are also covered family members. In addition, any other blood relative of the employee “whose close association with the employee is the equivalent of a family relationship” is a covered family member.
Credit for other paid leave offered by employer. Paid leave already offered by the employer can count toward the employer’s obligations under the Earned Sick Leave Law, but only if the employer’s leave is in the amounts required under the law (at least 40 hours a year, accrued at the same rate of 1 hour for every 30 hours worked if not front-loaded), and available for all of the reasons specified in the law.
Employer obligations. Employers are required, effective October 29, to post a notice in conspicuous places. Under the proposed regulations, the employer can post the notice on the company intranet, as long as all employees have access to it. Within 30 days of the Commission’s issuance of the notice, a copy of the notice must be given to each current employee. Under the proposed regulations, it is acceptable for the employer to email the individual notices to the employees. New hires must receive a copy of the notice when they begin employment. In addition, the employer must provide a copy of the notice to any employee upon request.
Apart from the specified situations in which the employer may seek documentation of the need for earned sick leave (see below), the proposed regulations say that any request for earned sick leave is presumed valid. Unlike leave under the federal Family and Medical Leave Act, there is no authorized “pre-approval” certification.
Employer rights. If leave is foreseeable, the employer can require that the employee provide a maximum of seven days’ notice. If the leave is not foreseeable, the employer can require that the employee provide notice as soon as practicable. The employer must give prior notice of any employee-notification requirements.
The employer can also prohibit foreseeable earned leave on certain designated days of the year and can require documentation for unforeseeable leave taken on those days. Under the proposed regulations, these designated days “shall be limited to verifiable high-volume periods or special events.” The examples given are an airline that prohibits foreseeable leave around the Thanksgiving holiday, and a company that prohibits foreseeable leave during a new-product launch. The proposed regulations also require that the employer provide reasonable notice to employees of any such designated dates.
If any earned leave is more than three days, the employer has the right to ask for documentation. For medical treatment of an employee or employee’s family member, a doctor’s note is acceptable documentation as long as it indicates the need for leave and, if possible, the duration.
Payout in lieu of carryover-“accrual.” In the last month of the benefit year, the employer can offer to pay the employee for his or her accrued, unused earned sick leave. The employee must make an election within 10 calendar days of the date of the employer’s offer. If the employee wants the payout, he or she can choose to be paid for all of the accrued, unused leave (100 percent) or half (50 percent). Any earned sick leave that is not paid out must be carried over into the subsequent benefit year, up to the maximum of 40 hours.
Payout in lieu of carryover-“front-loading.” If the employer “front-loaded” all 40 hours of leave at the beginning of the benefit year, the employer can choose whether to pay the employee for all accrued, unused leave in lieu of allowing the employee to carry the leave over into the following year. The employer does not have to offer the “50 percent” option to the employee.
Payout on termination of employment. Under the law, terminated employees are generally not entitled to be paid for their accrued, unused earned sick leave unless a collective bargaining agreement or employer policy provides otherwise. If an employee is laid off and is recalled within six months, then the employee automatically receives all of his or her earned sick leave that was accrued as of the time of layoff.
Employers may not require employees to use earned sick leave.
Employers may not count earned sick leave time as a “chargeable” absence under a no-fault attendance policy.
Any information provided by an employee in connection with an earned sick leave request must be kept confidential.
In charging an employee for use of earned sick leave, employers may use any increment of time that does not exceed the length of the shift that the employee was scheduled to work.
Employees and unions may waive their rights under the law pursuant to a collective bargaining agreement.
If the workforce is covered by a collective bargaining agreement, the law will not apply until the agreement expires.
The Earned Sick Leave Law preempts all local ordinances providing paid leave. According to the Bloomberg BNA Daily Labor Report, there are 13 local paid leave laws in New Jersey that are preempted.
Violation, retaliation, and recordkeeping.
Failure to give earned sick leave to an employee who is entitled to it violates the New Jersey State Wage and Hour Law. Retaliation against employees who exercise their rights under the law is prohibited, even if the exercise of rights is based on a good-faith but mistaken belief. If adverse action is taken against an employee within 90 days of the employee’s protected activity under the law, there is a rebuttable presumption that the employer retaliated against the employee.
Records related to earned sick leave must be retained for five years.
The full text of the Earned Sick Leave Law is available here. The required employee notice is available here. The proposed regulations (again, comments are being accepted until December 14, 2018) are available here.
Now you’re ready!