NJ Legislature Passes Paid Sick Leave Bill

On the heels of sweeping pay equity legislation, the New Jersey Legislature has passed a comprehensive paid sick leave bill that, if signed, will require employers to provide employees with paid time off for a variety of purposes.

For What Purpose Can Leave Be Taken?

Employees can use paid sick leave for the following purposes:

  1. diagnosis, care, treatment, or recovery related to the employee’s illness;
  2. to care for a family member during diagnosis, care, treatment, or recovery related to a family member’s illness;
  3. for certain absences resulting from the employee or a family member being a victim of domestic or sexual violence;
  4. 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
  5. to attend school-related conferences, meetings, or events, or to attend other meetings regarding care for the employee’s child.

Paid time off used for these purposes must be paid at the same rate of pay with the same benefits as the employee normally earns.

How Much Leave Must Be Provided?

Employees will be entitled to one hour of paid time off for every 30 hours worked, but employers may cap accrual at 40 hours. Alternatively, employers may provide employees with the full amount of earned sick leave at the beginning of the benefit year. Employers are under no obligation to allow an employee to use (or carry over from year to year) more than 40 hours of earned sick leave, and employers using the “1 hour for 30 hours” option will have the option to offer employees payment for unused earned sick leave at the end of the benefit year, which the employee may accept in lieu of carrying the leave over. Employers who provide the full amount of leave at the beginning of the benefit year must either pay for the unused sick leave in the final month of the benefit year or allow the employee to carry forward any unused sick leave to the next benefit year.

Although employees begin to accrue sick leave when they commence employment, an employer may delay an employee’s eligibility to use accrued leave until the 120th calendar day after he or she commenced employment or, for existing employees, on the 120th day after the law takes effect.

What If an Employer Offers Other Paid Time Off (e.g., Vacation and Personal Days)?

Although the bill covers “earned sick leave,” it recognizes that employers may already have paid time off policies. An employer is in compliance with the bill’s requirements if it offers any type of paid time off that meets the bill’s requirements. For example, an employer who allows employees to use vacation time for the purposes set forth above is in compliance with the bill so long as vacation time accrues at the appropriate rate. However, employers allowing employees to use paid time off as “sick leave” for the purposes covered by the bill should be mindful of the bill’s other provisions, including its anti-retaliation, non-discrimination provisions, and recordkeeping requirements. For instance, when an employer takes an adverse action against an employee within 90 days of the employee engaging in activities protected by the new law, the employer is subject to a rebuttable presumption of an unlawful retaliatory personnel action.

Must an Employer Pay for Unused Earned Sick Leave at Separation?

Unless an employer policy or collective bargaining agreement provides otherwise, an employee is not entitled to payment of unused sick leave upon separation from employment.

How Would the Law Impact Local Sick Leave Ordinances?

As previously reported, more than 10 New Jersey municipalities have enacted their own paid sick leave ordinances. The new law will, after its effective date, preempt those laws, and any other ordinance, resolution, law, rule, or regulation concerning its subject matter. Furthermore, the new law will prohibit counties and municipalities from enacting any new ordinance, resolution, law, rule, or regulation regarding earned sick leave.

Which Employers Are Covered by the Bill?

Virtually all employers operating in New Jersey are covered. The bill’s definition of “employer” excludes only public employers that are required to provide paid sick leave pursuant to a different New Jersey law, rule, or regulation.

Are Any Employees Excluded from the Bill’s Reach?

Yes, the law does not apply to: (1) employees performing services in the construction industry under contract pursuant to a collective bargaining agreement; (2) “per diem health care employee[s]”; or (3) public employees receiving paid sick leave pursuant to another New Jersey law, rule, or regulation. The bill’s definition of employee is otherwise very broad, applying to any “individual engaged in service to an employer in the business of the employer for compensation.” Notably, the law specifies that, in the case of a temporary help service firm placing an employee with client firms, earned sick leave shall accrue on the basis of the total time worked on assignment with the temporary help service firm, and not separately for each client firm to which the employee is assigned.

What if Employees Are Covered by a Collective Bargaining Agreement?

The new law will not apply (temporarily) to employees who are covered by active collective bargaining agreements on the law’s effective date. The law will begin to apply to those employees when their collective bargaining agreements expire.

What Notice Must an Employer Give Concerning Paid Sick Leave?

The bill requires employers to post in a conspicuous place a notice to be issued by the Commissioner of Labor and Workforce Development. In addition, employers will be required to provide written copies of the notice to employees within 30 days of the date on which the Commissioner issues the notice, or at the time of hiring for employees hired after that date. Employers must also provide a written copy of the notice to employees upon request.

Are There Recordkeeping Requirements?

Yes. Employers will be required to maintain records documenting paid leave taken by employees for the purposes set forth above for a period of five years.

What Are the Penalties for Noncompliance?

An employer who fails to comply with the new law’s requirements will face exposure to fines and administrative penalties, and an employee will have the right to pursue a civil action seeking compensatory damages, liquidated damages, costs, and attorneys’ fees.

When Will the New Law Take Effect?

The bill will take effect 180 days after it is enacted.

For questions regarding this bill or paid sick leave laws generally, please feel free to contact an attorney in the Gibbons Employment & Labor Law Department.

Susan L. Nardone is a Director in the Gibbons Employment & Labor Law Department.
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