New Jersey Governor Murphy signed into law an expansive paid sick leave program.  Proudly signing the law, Governor Murphy said “there is no reason anyone should have to choose between economic security and their health.”  The law requires companies that have New Jersey employees to provide 40 hours of paid sick leave each year.  This law, together with the recently passed Equal Pay Act, furthers the Governor’s (and his party’s) stated agenda of expanding employee protections.  New Jersey joins nine states and the District of Columbia in providing paid leave for its employees. 

New Jersey employer groups had objected to the mandated sick leave on the basis that the majority of New Jersey employers already provide paid time off under private paid time off policies.  The state act, however, clears up much confusion that was caused by local ordinances in a handful of New Jersey towns, preempting those ordinances and precluding towns and cities from enacting new paid leave laws.  The law goes into effect on October 29, 2018.

The key highlights of the Paid Sick Leave Act include:

• The Act applies to all employers regardless of size who employ workers in the State, including temporary agencies.
• Employees accrue one hour of paid sick time for every 30 hours worked.
• Employees are entitled to 40 hours of paid sick time per year and can carry over up to 40 hours from one benefit year to the next.
• A benefit year is a period of twelve months and the employer can designate the commencement of the calendar year, but then may only change the benefit year upon approval of the Department of Labor.
• Accrued but unused sick time MUST be carried over the next year, unless the employer offers and the employee accepts payment in lieu of the carry-over.
• An employer may elect to offer paid time off that includes personal days, vacation days and sick days as long as the employee may use the PTO for the reasons permitted under the Act and the accrual, carry-over, and total hours paid are equal to or greater than that provided under the Act.  Employers may also advance the 40 hours of paid time for ease of calculation.
• Earned paid sick leave is limited to absences related to the:
  
  
  • Diagnosis, care, treatment, or recovery from mental or physical illness, injury, or for preventative care.
  • Care for a family member during diagnosis, care, treatment or recovery from mental or physical illness, injury or preventative care.
  • Employee’s or family member’s status as a victim of domestic or sexual violence for certain defined activities (e.g. legal proceedings, medical or psychological care, relocation)
  • The closure of an employee’s workplace or school/child care center due to a public health emergency
  • Attendance of a school-related function of the employee’s child relating to education or care of the child’s health conditions or disability
• If foreseeable, the employee is required to provide advance notice and for absences of three or more consecutive days, the employer may require reasonable documentation.
• The Department of Labor will be developing notices for employers to post and disseminate to employees about their rights under the new law.
• Employers must maintain records of hours worked and sick leave taken for a period of five years.
• Employers may not retaliate or discriminate against any employee exercising right to leave.
  
  
  • There is rebuttable presumption of an unlawful act if an employer takes adverse action with 90 days where the employee has filed a complaint with the DOL, cooperated with an investigation by the DOL, informing employees of the employer’s violation, or opposing any policy, practice or act prohibited by law
• Violations of the Act will be addressed under the Wage and Hour laws and failure to make available or pay sick leave will be deemed a failure to meet the wage payment requirements, which can subject the employer to payment of the wages, fines, liquidated damages.

Employers have some time to ensure that their PTO practices match up with the new law’s requirements and to work on their accrual and recording mechanisms.  The Act may come as a surprise to very small employers since it applies to all employers regardless of the number of employees working in the State.  Employers may want to review handbooks and policies to ensure compliance with the new act. 

More changes for employers may be on the horizon.  Bills regarding New Jersey’s medical marijuana program and confidentiality agreements used for settlement of harassment and discrimination claims are pending in the state legislature.