New Jersey’s Paid Sick Leave Act: It’s Complicated, and It Covers More Than Sick Leave

The New Jersey Paid Sick Leave Act (“NJPSLA”) takes effect on October 29, 2018. Regulations for implementing the requirements of the new law were issued on September 17, 2018. Interested parties have until December 14, 2018 to file comments on the proposed regulations.

Applicability

All employers must comply with the new law; there is no “small employer” exemption.

All employees, including exempt employees, but excluding construction workers covered by a collective bargaining agreement, are eligible for paid sick leave. Workers outside the construction trades currently covered by a collective bargaining agreement will become eligible under the NJPSLA upon expiration of the collective bargaining agreement.

Covered Leave

The NJPSLA provides paid leave to employees in connection with the diagnosis and treatment of their own illness, physical or mental, or injury, and those of a family member. In addition, paid leave may be taken to deal with incidents of domestic or sexual violence; to attend school events or conferences; and to deal with school closures or workplace closures.

Accrual

Employees are entitled to up to 40 hours of paid leave in a benefit year. A benefit year is defined as a period of 12 consecutive months selected by the employer. Leave accrues at the rate of one hour for every 30 hours worked. In the alternative, an employer may front-load leave by accruing the full 40-hour entitlement at the start of the benefit year. Leave begins to accrue on an employee’s hire date. An employer may require new employees to wait for 120 days to use accrued leave, whether that leave accrues over time or is front-loaded.

Payment

Payment for sick leave is at an employee’s regular hourly rate, excluding overtime. Where an employee’s compensation includes tips, food or lodging, and it is not feasible for an employer to compute an hourly rate, the employee may be paid at a rate acceptable to the employer and the employee that is not less than the New Jersey minimum wage (currently $8.60). Commissioned employees, whether paid commission only, or a combination of commission and a base rate, may be paid at the base rate or the state minimum; whichever is greater.

Carryover or Payout

Employees may carry over up to 40 hours of accrued, but unused, paid sick leave from one benefit year to the next. Employers may, but are not obligated, to give employees the option to receive payment for accrued but unused paid sick leave in the final month of the benefit year. Employees who opt for a payout may choose to receive payment for 50% or 100% of the balance of unused sick leave.

Blackout Periods

Employers may impose blackout days when employees may not request foreseeable leave if granting leave would unduly disrupt the employer’s operations, for example, during periods of high business volume or at the launch of a new product or service.

Record Keeping

Employers must keep records of leave accrued and used, and the rate at which leave is paid. However, the record-keeping requirement does not apply to exempt employees where the employer front-loads leave or assumes a 40-hour work week. Records must be retained for a period of five years.

Notice

Employees must give at least seven days’ notice of “foreseeable” leave; for example, a doctor appointment or scheduled treatment. Where leave is not foreseeable, an employer may require employees to give “reasonable” notice of the leave. “Reasonable” means reasonable considering all of the facts and circumstances. A caveat: Employers must first inform employees of the requirement to provide reasonable notice before imposing that requirement. Employers are also required to (1) display a poster notifying employees of their rights and responsibilities under the NJPSLA; (2) to inform employees about their rights under the act within 30 days of the distribution of the notice requirements by the Department of labor and Workforce Development; (3) at the time of hire; and (4) the first time that an employee requests a copy of the notice

The proposed regulations answer many, but not all, questions not resolved in the NJPSLA. Contact Praxis if you have questions about the act or the proposed regulations.