The New Jersey paid sick leave mandate will take effect on October 29, 2018, and below is the prior email blast we sent you in June concerning this new requirement.  Since then, proposed regulations have been released by the New Jersey Department of Labor and Workforce Development which we have included below.

Who is covered?

All employees of private and public companies employed in NJ are covered except:

  1. Construction industry employees covered by a collective bargaining agreement;
  2. Per diem healthcare employees;
  3. Public employees who are provided with sick leave;
  4. Non-construction employees covered by a collective bargaining agreement (CBA) at the time the law goes into effect, but it will apply once the CBA expires.

Paid sick leave calculation:

The law stipulates that an employee will accrue 1 hour of sick leave for each 30 hours worked with a maximum of 40 hours over 12 months.  Alternatively, an employer also has the option to provide the full amount of the earned sick leave (40 hours) on the first day of the benefit year which will significantly minimize paperwork.

What is covered?

The paid sick leave can be used for:

  1. Medical, mental, or physical care for illness or injury;
  2. Preventive medical care;
  3. Care of a family member for medical care;
  4. Absence resulting from an employee or family member being the victim of domestic or sexual violence if the leave is to obtain medical, counseling, relocation, legal, or other services;
  5. Closure of employees work place, child’s school or place of care, by order of a public official due to an epidemic or other public health emergency;
  6. The employee to attend a child’s school related conference, meeting, function, or other event requested or required by school staff.

A family member is defined very broadly as any individual “whose close association with the employee is the equivalent of a family relationship.”

When is the sick leave usable?

If the employee is hired prior to October 28, 2018, paid leave will accrue starting on October 30, 2018 and can be used beginning on the 120th day after the date of hire.

If the employee is hired after October 30, 2018, paid leave begins to accrue on the date of hire and can be used beginning on the 120th day after hire.

Advance notice can be required for foreseeable events.  If unforeseeable sick leave is taken for at least three consecutive days, documentation may be required.

Additional guidance:

The following are additional points related to the new paid sick leave law:

  1. If a PTO policy exists, which combines sick, vacation, and personal time, it can apply to satisfy the obligations under this law;
  2. Pay for sick time must be at the same rate as normal pay for the employee (see proposed regulation #2 below);
  3. Employers cannot take retaliatory action against the employee for using this time;
  4. Record keeping is required;
  5. Notification to employees is required;
  6. Penalties for non-compliance are established;
  7. Employees cannot be required to work extra time to make up for using sick time;
  8. Unused sick leave may be carried over to the next year;
  9. Unused sick leave upon separation is not required to be paid;
  • This law replaces any existing local laws regarding sick leave.

Proposed Regulations:

  1. Calculation of hours worked for workers not paid hourly such as exempt employees:
    1. Record the actual hours worked.
    2. Presume, for this purpose, that employees work 40 hours per week.
  2. Calculating the rate of pay for sick leave hours when an employee is paid on commission, for piecework, or at different rates:
    1. If paid by commission or a base plus commission, sick leave is paid at the greater of the base rate or the NJ minimum wage.
    2. If paid for piecework or piecework plus a base, the rate for sick leave is the actual total earnings for the seven most recent workdays divided by the total hours worked over those seven days.
    3. If paid at multiple rates, the rate of pay for earned sick leave will be the amount that the employee is regularly paid for each hour of work as determined by adding together the employee’s total earnings, exclusive of overtime premium pay, for the seven most recent workdays and dividing the sum by the total hours of work during that seven-day period.
  3. Limitation on use of sick leave:
    1. A foreseeable use of sick leave includes a doctor’s visit, medical treatment, or therapy appointment. For these types of sick leave, an employer can restrict the use of these days.  The restrictions can apply to high volume days or special events.  These days must be reasonably known to the employees.
    2. For unforeseeable sick leave days, the employer may require notice given as soon as practical.

As the NJ DOL continues to fill gaps in the law and new details emerge, Sax will provide additional information as needed.  For further information on this matter, please contact Alan S. Isaacs, CPA, MBA at [email protected].

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