The changes in New Jersey following the election of Governor Phil Murphy continue. On May 2, 2018, Governor Murphy signed the New Jersey Paid Sick Leave Act (the "Act"), making New Jersey the tenth state to guarantee employees paid sick leave. The Act is scheduled to take effect 180 days after Governor Murphy’s signature, which is projected to be Monday, October 29, 2018. The Act creates uniformity across the state regarding sick leave by preempting any prior ordinances that were passed prior to the law. As a result, employers need only to comply with the new state law once it takes effect.
Employers should carefully review the new and plentiful requirements under the Act, as described below, and carefully examine their leave practices and policies, as well as employee handbooks, to ensure compliance with the new law. Employers should remove any policies that were specific to ordinances that were in effect as those ordinances are now preempted. Contact us at Saul Ewing Arnstein & Lehr with any questions on the new law and its requirements, or to discuss a review of your current handbook and policies.
SUMMARY OF THE ACT:
Under the Act, employers must establish a "benefit year," which is a period of twelve consecutive months where an employee accrues and uses earned sick leave. Once an employer establishes a benefit year, the employer cannot change the year without notifying the Commissioner of Labor and Workforce Development (the "Commissioner") of the change. During the benefit year, employees accrue one hour of earned sick leave for every thirty hours worked. However, employers can choose to offer forty hours of paid sick time on the first day of the benefit year, essentially frontloading the time, or utilize a PTO policy. Employers are not required to provide more than forty hours of paid sick leave in one benefit year.
Unless the employee has accrued sick time before the effective date of the Act, earned sick leave begins to accrue on the Act’s effective date for any employee who is hired and begins employment before the effective date. These employees can use the earned sick leave starting on the 120th calendar day after the employee begins employment, unless the employer agrees to an earlier date, after which the employee can use earned sick leave as soon as it is accrued. Employees hired after the effective date begin to accrue sick leave when they begin employment, and can use the earned sick time on beginning on the 120th day after the employee begins employment, unless the employer agrees to an earlier date.
An employee’s paid sick leave benefits survive if employee is transferred within a company, separated from the employer but reinstated within six month, or a different employer succeeds or takes the place of an existing employer. Further, employers can choose the increments its employees can use earned sick leave, so long as the largest increment of earned leave is no longer than the number of hours the employee is scheduled to work during the employee’s particular shift.
Employees may carry over from one benefit year to the next accrued, but unused, paid sick leave, so long as the employee does not carry forward more than forty hours of earned sick leave. Alternatively, the employer can offer, and the employee can accept, payment for unused time in the final month of the benefit year. If an employer offers employees payment for accrued, but unused, sick leave in the final month of the benefit year, employees must choose within ten calendar days to accept or decline the employer’s offer of payment. If the employee agrees to receive a payment, the employee chooses whether to receive payment for either the full amount of unused sick leave, or for fifty percent of the amount of unused earned sick leave and carry over the remaining amount of leave, so long as the employee does not carry over more than forty hours.
The definition of "employee" under the act is broad and encompasses "an individual engaged in services to an employer in the business of the employer for compensation." However, the Act does not include employees in the construction industry under contract pursuant to a collective bargaining agreement, per diem healthcare workers, or public employees who have sick leave benefits. There is no minimum number of hours an employee has to work to be eligible for leave.
Employers covered under the Act are all persons, firms, businesses, educational institutions, nonprofit agencies, corporations, limited liability companies, or any entity that employs employees in New Jersey. The Act also includes temporary help service firms who place employees with client firms in the definition of covered employer, and earned sick leave accrues on the basis of the total time worked on an assignment with the temporary help service firm, not separately for each client firm the employee is assigned. Notably, the Act does not exempt employers based on a smaller number of employees.
Reasons for Leave
Employers must permit employees to use accrued sick leave for the following reasons:
time for diagnosis, care, or treatment of, or recovery from, an employee’s mental or physical illness, injury, or other adverse health condition, or for preventive medical care for the employee;
time for the employee to aid or care for a family member of the employee during diagnosis, care, or treatment of, or recovery from, the family member’s mental or physical illness, injury, or other adverse health condition, or during preventive medical care for the family member;
time needed as a result of an employee or a family member of the employee being a victim of domestic or sexual violence, including time for medical care, counseling services, legal services, and participation in a civil or criminal proceeding related to the domestic or sexual violence;
time for when the workplace, school, or child care is closed by a public official because of a public health concern;
time to attend a school-related conference, meeting, function, or other event requested or required by a school for the child’s education, or a meeting about a child’s care in connection with the child’s health conditions or disability.
Foreseeable and Unforeseeable Leave
If an employee needs to use earned sick leave, and the leave is foreseeable, an employer can require advance notice, not to exceed seven calendar days before the leave, of the intention to use the leave and its expected duration. The employee must make a reasonable a reasonable effort to schedule the sick leave in a way that does not unduly disrupt the employer’s operations. If the leave is not foreseeable, an employer can require an employee to give notice of the intent to use the leave as soon as practicable, if the employer has notified the employee of this requirement. Employers can prohibit employees from using foreseeable earned sick leave on certain dates, and require documentation if sick leave that is not foreseeable is used during those dates.
For earned sick leave of three or more consecutive days, employers can require reasonable documentation that leave is being taken for a permitted purpose:
For 1 and 2 above - includes documentation signed by a health care professional treating the employee or family member stating the need for the leave, and if possible, the number of days of leave.
For reason 3 above - includes medical documentation, a law enforcement agency record or report, a court order, documentation the perpetrator of the act was convicted of a domestic or sexual violence offense, certification from a certified Domestic Violence Specialist or a representative of a designated domestic violence agency or other victim services organization, or other documentation by a social worker, counselor, member of the clergy, shelter worker, health care professional, attorney, or other professional.
For reason 4 above - includes a copy of the order of the public official, or the determination by the health authority.
Employers must retain records documenting the hours employees work and the earned sick leave employees take for a five-year period. If the Department of Labor and Workforce Development (the “Department”) requests access to the records to monitor compliance with the Act, the employer must provide the Department with the records. If an employer does not maintain or retain adequate records or does not allow the Department access to the records, it will be presumed the employer failed to provide the earned sick leave absent clear and convincing evidence otherwise.
Businesses must notify employees of their rights under the Act in a form issued by the Commissioner, including the amount of earned sick leave they are entitled to and the terms of its use, as well as remedies under the Act if the employer fails to provide the required benefits or retaliates against an employee. The notification must be posted in a place where all employees have access, and the employer must provide each employee with a written copy of the notification no later than thirty days from the issue of the notification, or at the time of hiring after the notice is issued.
Enforcement and Anti-Retaliation
Aggrieved employees have a private right of action under the Act that includes, among other damages, actual damages, plus liquidated damages in an amount equal to the actual damages the employee sustained.
Employers cannot take retaliatory action or discriminate against an employee because the employee requests or uses sick leave under the Act or files a complaint with the Commissioner alleging the employer violated the Act. Further, there is a rebuttable presumption of an unlawful retaliatory action if an employer takes an adverse action against an employee within 90 days of an employee (1) filing a complaint with the Department or a court alleging a violation of the Act, (2) informing any person about an employer’s alleged violation of the Act, (3) cooperating with the Department or other persons in the investigation or prosecution of any alleged violation of the Act, (4) opposing any policy, practice or act that is unlawful under the Act, or (5) informing any person of his or her rights under the Act.