New Jersey Makes Paid Sick Leave Mandatory

New Jersey has become the 10^th state to make some form of paid sick leave mandatory for employers to provide.  This requirement will take effect on October 29, 2018.

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 health care 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 120^th 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 120^th 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;
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 no-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;
10. This law replaces any existing local laws regarding sick leave.

What should employers do now?

If you already offer a sick leave or other paid leave policy, determine that the new leave law will dovetail with the existing policy.  Make any changes and adaptions necessary.   If you do not have a paid time off policy, the process of crafting a policy should begin now.

As the NJ DOL fills 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 aisaacs@saxllp.com.