On Wednesday, May 2, 2018, Governor Murphy signed the New Jersey Paid Sick Leave Act into law. This law requires employers to provide 40 hours of paid sick leave to employees within the benefit year. The Act will go into effect October 29, 2018, 180 days after Governor Murphy signed the bill.  Meaning, you have time to prepare for compliance. Here is what you need to know:

What Employers Need to Provide

Employers need to provide up to 40 hours of paid sick leave a year to employees, accruing at a rate of one hour for every 30 hours worked. Employers can establish their own “benefit years,” they must simply be a consecutive 12-month period.

If the idea of tracking accrual this way for all employees is daunting, you may front-load the 40 paid sick leave hours at the beginning of the year. Also, if your policy already provides equal or greater benefits, you need not change it.

Who is Covered

An employer is defined very broadly within the Act. An employer is any “person, firm, business, education institution, nonprofit agency, corporation, limited liability company or other entity that employs employees within the state.”

Similarly, employees are broadly defined as individuals “engaged in service to any employer” for compensation. However, construction works covered by a collective bargaining agreement are not covered by the act.

Sick Leave Uses

Employers should permit employees to use sick leave for the following reasons:

• Diagnosis, care or treatment of, or recovery from, mental or physical illness, or for preventative medical care;
• To care for a family member during diagnosis, care, treatment of or recovery from a mental or physical illness, or during preventative medical care;
• Necessary absence due to the employee or a family member being the victim of domestic or sexual abuse. This includes for legal services due to the same;
• When either the employee is not able to work due to closure of the workplace, or the child of the employee cannot attend school due to closure, by order of a public official due to an epidemic or other public health emergency, or due to a determination that the employee’s or child’s presence would jeopardize the health of others.

Employers note that the act covers preventative care for both the employee and the employee’s family members. Training management on these uses is a wise way to protect your company.

Allowing Accrued Time to Roll Over

In the final month of the benefit year, the employer may either offer to pay the employee for any unused sick time, either for the full amount or for 50 percent, based on the employee’s then current rate of pay. If the employee declines or elects 50 percent payment, the employee is entitled to carry forward any unused sick time to the following year. However, if the employer is a “small employer,” less than 10 employees, the employer does not have to allow carryover of more than 40 hours. Otherwise, the employer does not have to allow carryover of more than 72 hours of paid sick leave.

Do I Need to Provide Notice?

Yes, the law includes notice provisions that require both posting notice of employee rights and providing written notice directly to employees.

Do I Need to Pay Out Sick Leave Upon Termination?

No, the Act expressly states employers do not have pay out accrued but unused sick leave, unless you have a policy or collective bargaining agreement that states otherwise.

What About the Local Ordinances that Provide for Sick Leave?

This law preempts them. Meaning, you can focus only on complying with the New Jersey Paid Sick Leave Act for all locations within the State.

Can an Employee Sue an Employer for Violating this Law?

Yes, the Act creates a private right of action. This means if an employer violates the Act, an employee may bring a lawsuit and, if successful, may be awarded damages. The Act prohibits an employer from taking discriminating or retaliating against an employee for requesting or using earned sick leave.

The damages available to employees who bring actions under this law are the full amount of the owed sick leave, any actual damages suffered, liquidated damages equal to the amount owed and attorney’s fees and costs.

Bottom Line

Employers should be fully aware of who is entitled to leave, how sick leave accrual works, and the rollover provisions. You have time now to make sure your policies comply and your personnel understands the company’s obligations.

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