On January 29, 2014, the Mayor of Newark, New Jersey signed into law an Ordinance requiring employers to provide paid sick leave to their employees, effective May 29, 2014, or, for employees who are covered by a collective bargaining agreement ("CBA"), upon expiration of the current union contract. Similar laws have been enacted in the State of Connecticut and other localities such as New York City, Jersey City, Washington, D.C., Seattle, San Francisco and Portland, Oregon. This client alert highlights key provisions of the Ordinance regarding employee rights and employer obligations, record-keeping and notice requirements, and enforcement and remedies.

Coverage

Under the Ordinance, an "employer" is any individual or entity except the federal, state, or city government. Equally broad is the term "employee," which includes any individual employed by an employer for at least 80 hours a year in Newark, with the exception of certain public employees and members of a construction union who are covered by a CBA. Further, any or all of the requirements of the Ordinance may be waived as to unionized employees, if the waiver is contained in a CBA in express, clear and unambiguous terms.

Rights & Requirements

Accrual of Paid Sick Time

Under the Ordinance, employees accrue at least one hour of paid sick time for every 30 hours worked. Employees who are exempt from overtime requirements under the Fair Labor Standards Act are assumed to work 40 hours in each workweek for purposes of paid sick time accrual. If their normal workweek is less than 40 hours, however, they accrue sick time based upon their normal workweek. Individuals who work for employers with 10 or more employees[1] are entitled to accrue up to 40 hours of paid sick time in a calendar year, while individuals who work for employers with fewer than 10 employees are entitled to accrue up to 24 hours in a calendar year, with limited exceptions.[2] Employees begin to accrue sick time upon the effective date of the Ordinance and thereafter upon hire, but are not entitled to use it unless they have completed at least 90 calendar days of employment. At its discretion, an employer may loan sick time to an employee in advance of accrual.

Employees are entitled to carry over up to 40 hours of unused accrued sick leave from one calendar year to the next. Alternatively, the employer may, but is not required, to pay the employee for any unused sick time at the end of the calendar year. In any event, an employee is not entitled to take more than 40 hours of sick leave in a calendar year (although employers may have obligations under other laws to provide additional leave time). An employer may designate any regular consecutive 12-month period as the "calendar year" to be used for purposes of this law.

If an employer has a paid leave policy that affords an amount of paid leave sufficient to meet the total annual accrual requirements under the Ordinance and permits the leave time to be used in the same circumstances, the employer does not have to provide additional paid sick time.

Moreover, nothing in the Ordinance requires an employer to reimburse an employee for unused paid sick time upon termination, resignation, retirement or other separation from employment.

If an employee is transferred to another division, entity or location, but remains employed by the same employer, the employee retains any unused accrued sick time. Moreover, if an employee is separated from employment but rehired within 6 months of separation, previously accrued but unused sick time must be reinstated and prior employment is counted toward meeting the requirement that the employee have been employed 90 days before using accrued time. Also, employees who remain employed by a successor employer may retain and use the paid sick time accrued with the predecessor employer.

Use of Sick Time

Employees must be allowed to use their sick time for any of the following reasons:

• to care for their own or a family member's[3]: mental or physical illness, injury, or health condition ("sickness"), need for medical diagnosis, care, or treatment of a sickness, or need for preventive medical care;

• when the employee's place of business is closed by order of a public official due to a public health emergency ("forced closing") or an employee's need to care for a child whose school or place of care has a forced closing, or to care for a family member when a health authority (with jurisdiction) or a health care provider has determined that the family member's exposure to a communicable disease would jeopardize the health of others in the community (whether or not the family member has actually contracted the communicable disease).

An employer may request that the employee confirm in writing following his or her use of sick time that such time was used for a permissible purpose under the Ordinance. An employer may require "reasonable advance notice" of the intention to use sick time where the need is foreseeable, but cannot require more than seven days' notice before the date sick time will begin. Where the need to use sick time is not foreseeable, an employer may require an employee to provide notice before the beginning of the employee's work shift or work day or, in cases such as emergencies where advance notice is not possible, as soon as practicable.

After an employee has used sick time for 3 consecutive days or 3 consecutive instances (in cases where the employer determined that paid sick time could be used in increments of less than one day), an employer may require reasonable supporting documentation, including documentation signed by a health care professional, that sick time was for a purpose covered by the law.  An employer may not require that the documentation explain the nature of the illness, however, as a condition of providing paid sick time under the Ordinance. It is up to the employer to determine whether paid sick time may be used in increments of less than one day.[4]

Anti-Retaliation Protections

The Ordinance provides employees with expansive protections against retaliation for exercising (or attempting to exercise) their rights under the Ordinance, including for (i) filing a complaint or informing any person about an alleged violation of the Ordinance; (ii) cooperating with the Newark Department of Child and Family Well-Being ("Department") in its investigations of alleged violations of the Ordinance; (iii) participating in any administrative or judicial action regarding an alleged violation of the Ordinance; or (iv) informing any person of his or her potential rights under the Ordinance. An employer also may not require, as a condition of taking sick time, that the employee search for or find a replacement during the employee's absence.

Notice and Posting Requirements

All employers must provide a written notice of rights under this law to each employee individually as soon as practicable when the Ordinance goes into effect, and thereafter to each new hire at the time employment commences. Notice to the individual must be in English and the primary language spoken by that employee, so long as the primary language of the employee also is the primary language of at least 10% of the employer's workforce. The Department may issue a form of notice.

In addition, employers must display a poster in a conspicuous and accessible place in each business establishment covered by the Ordinance. The poster must be in English and in each language that is the first language of at least 10% of the employer's workforce. The Department also may issue this poster.

Employer Records

Employers must allow the Department reasonable access to records and monitor compliance with the requirements of the Ordinance. An employer's failure to maintain or retain adequate records documenting hours worked and paid sick time taken will create a rebuttable presumption that the employer has violated the Ordinance, absent clear and convincing evidence otherwise.

Confidentiality and Non-Disclosure

An employer may not require disclosure of the specific details relating to an employee's or an employee's family member's medical condition as a condition of providing sick time under the Ordinance. Moreover, if the employer possesses any health information about an employee or the employee's family member, such information must be treated as confidential and only disclosed to the affected employee or with the permission of the affected employee.

Enforcement & Remedy

The Ordinance empowers the Department to implement and enforce the Ordinance. In the event that the Department cannot resolve a complaint, an employee may file suit in Newark Municipal Court. Submitting a complaint to the Department is neither a prerequisite nor a bar to bringing a private action.

An employer who violates the Ordinance is subject to a maximum of a $1,000 fine, 90 days of imprisonment, and/or 90 days of community service. Each day the violation continues is considered a separate offense. In addition to these penalties, an employer who violates the Ordinance is subject to payment of restitution in the amount of any paid sick time unlawfully withheld. The Department also may publicize online and in other media the names of employers who violate the Ordinance.

Takeaway

Newark employers should begin familiarizing themselves with the new Ordinance and should prepare to comply with its requirements. This includes:

• determining whether existing paid leave policies and/or attendance policies are consistent with the new Ordinance including, but not limited to, with respect to amount of sick leave provided, accrual rates, purposes for which time may be taken, and sick time afforded to all employees, including those who are part-time or temporary;

• updating, revising or issuing new policies as appropriate;

• establishing procedures and forms for loaning sick time in advance of accrual, if the employer in its discretion decides to permit such advances;

• assessing the interplay of the rights and requirements provided under the Ordinance, the federal Family and Medical Leave Act, the New Jersey Family Leave Act, and the New Jersey Security and Financial Empowerment Act (SAFE Act);

• monitoring for issuance of the new poster and notice forms before May 29, 2014; 

• establishing procedures to comply with the individual notice, record-keeping, confidentiality, and non-disclosure obligations of the Ordinance; and

• training managers and supervisors regarding the requirements of the Ordinance.

Please contact your Proskauer relationship lawyer for further guidance on compliance with the Ordinance.

[1] To determine the number of employees, the Ordinance counts all employees who work for compensation on a full-time, part-time, or temporary basis. Where there are fluctuations in the number of employees who work for an employer in any given calendar year, the number of employees may be calculated based upon the average number of employees who worked for compensation during the preceding calendar year.

[2] Employees who are child care workers, home health care workers and food service workers are entitled to accrue up to 40 hours of paid sick leave regardless of the size of the employer. 

[3] A "family member" is defined as a (a) biological, adopted or foster child, stepchild or legal ward, a child of a domestic partner, a child of a civil union partner, or a child to whom the employee stands in loco parentis; (b) biological, foster, stepparent or adoptive parent or legal guardian of an employee or an employee's spouse, domestic partner or civil union partner or a person who stood in loco parentis when the employee was a minor child; (c) person to whom the employee is legally married under the laws of New Jersey or any other state or with whom the employee has entered into a civil union; (d) grandparent or spouse, civil union partner or domestic partner of a grandparent; (e) grandchild; (f) sibling; (g) domestic partner of an employee as defined by New Jersey law.

[4] Under the Family and Medical Leave Act (FMLA), an employer must account for the leave using an increment no greater than the shortest period of time that the employer uses to account for use of other forms of leave, provided that it is not greater than one hour and provided further that an employee's FMLA leave entitlement may not be reduced by more than the amount of leave actually taken. 29 C.F.R. §825.205(a)(1). Employers subject to the FMLA may wish to consider this in determining the minimum increment for use of paid sick leave.