By Prema Roddam
New Jersey will begin to enforce a new paid-sick-leave law, which is mandatory for all employers in New Jersey. The new law requires employers of all sizes in New Jersey to provide up to 40 hours of paid sick leave per year to covered employees. Below, we highlight the key features of the new law that directly affect an employer in the state of New Jersey.
The new law was signed by Governor Murphy on May 2, 2018 to go into effect on October 29, 2018. After enactment, employees will begin to accrue leave. The accrual rate is one hour per 30 worked, up to a maximum of 40 hours in one year. Employees will be eligible to use the accrued leave 120 days later. For employees hired after the effective date of the law, benefits will begin to accrue immediately, and they will be eligible to use the leave after 120 days. However, employers may agree to an earlier date.
Employers may consider these best practices prior to the law becoming effective on October 29, 2018:
Employers must:
Employers with bilingual workforces must post and provide the notification in English, Spanish, and any other language for which the NJDOLWD has made the notification available and which the employer reasonably believes is the first language of a significant number of the employer’s workforce.
Employees may use earned sick days for:
The law permits employers to require advance notice of foreseeable absences and allows businesses to prohibit the use of "foreseeable" paid-sick-leave benefits on certain dates, as well as require documentation if unforeseeable sick leave is used on those dates. If an employee is absent for at least three consecutive days, the business may request documentation to confirm the employee used the sick-leave benefits for a purpose permitted under the act.
Only three groups of employees will not receive coverage within this law, which are:
New Jersey’s Paid Sick Leave Law imposes the same penalties as those imposed for other wage and hour violations. These are fines of $250 for a first offense and $500 for subsequent offenses. For “willful violations,” or, when an employer is found to have intentionally disregarded the law or acted with indifference, penalties increase to between $100 and $1,000 and 10-90 days in prison. For further “willful” violations, employers can be fined between $500 and $1,000 and/or face between 10 and 100 days in prison.
Eligible employees are entitled to accrue sick leave at a rate of one hour of sick leave for every 30 hours worked in a benefit year (which may be any period of 12 consecutive months as established by the employer). An employer shall not be required to permit an employee to accrue more than 40 hours of sick leave in a given benefit year.
As an alternative to an accrual system, an employer may provide employees, in the beginning of each benefit year, with the full amount of earned sick leave that each employee would otherwise be entitled to accrue under the new law (the “front-loading method”).
An employer that currently offers its employees paid time off (which may include personal, sick, and/or vacation days) that accrues at a rate equal to or greater than that required by the new law, and that can be used for the same purposes and in the same manner as provided by the new law, may use such time to satisfy its obligations under the new law.
When sick leave is provided using an accrual system, employees may carry over up to 40 hours of earned but unused sick time into the following benefit year. Alternatively, employers may offer employees the option to receive payment of their unused sick days in the final month of the employer’s benefit year.
Employees may choose to: (i) accept payout of all earned but unused sick leave; (ii) decline the payout and carry over all unused time to the following benefit year; or (iii) accept payout for half of the earned but unused leave time and carry over the remaining earned sick leave, which shall not exceed forty hours.
When sick leave is provided using the front-loading method, the employer must either provide the employee with a payment for the full amount of unused earned sick leave in the final month of the employer’s benefit year or allow the employee to carry forward any unused sick leave to the next benefit year.
If you have any questions, please contact Prema Roddam, Esq. at our New Jersey office at 732-205-8600 or prema.roddam@chugh.com.
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