On May 2, 2018, New Jersey Governor Phil Murphy signed the New Jersey Paid Sick Leave Act (the “Act”) into law. The Act requires employers of all sizes to provide up to 40 hours of paid sick leave to employees during an employer-established benefit year. Under the Act, paid sick leave benefits accrue at a rate of one benefit hour for every 30 hours worked.

The Act applies to all New Jersey employers, but expressly exempts per diem healthcare employees, construction workers employed pursuant to a collective bargaining agreement, and public employees who already have sick leave benefits. In an effort to provide uniform obligations to employers operating within the State, the Act expressly preempts all similar local ordinances, including those local ordinances promulgated in Newark, New Jersey.

Under the Act, an employee may use paid sick leave benefits for the: (1) diagnosis, care, treatment, or recovery for the employee’s own mental or physical condition (inclusive of preventive care); (2) diagnosis, care, treatment, or recovery for a family member’s mental or physical condition (including preventive care); (3) time needed as a result of an employee’s or family member’s status as a victim of domestic or sexual violence (including counseling, legal services, or participation in any civil or criminal proceedings related to same); (4) time when the workplace, school, or childcare is closed by order of a public official due to a public health concern; and (5) time to attend a school-related conference or meeting. The definition of “family member” includes any individual “whose close association with the employee is the equivalent of a family relationship.”

New Jersey employers may establish increments in which an employee may use paid sick leave benefits. However, the largest increment may be no longer than the number of hours the employee is scheduled to work during the particular shift. The Act also permits employers to require advance notice of foreseeable absences. If an employee is absent for at least three consecutive days, employers may request documentation to confirm the employee used the sick leave benefits for a purpose permitted under the Act.

While an employee may carry over accrued but unused paid sick leave benefits, the Act does not require the employer to provide more than 40 hours of paid sick leave in a single benefit year. The Act does not require an employer to pay out an employee’s earned but unused sick leave upon separation from employment unless the employer maintains a policy permitting such practice.

Alternatively, employers may offer 40 hours of paid sick time or utilize a paid-time-off (“PTO”) policy. However, any employer PTO policy must provide equal or greater benefits and accrue benefits at an equal or greater rate than the benefits provided under the Act. The Act also presents additional recordkeeping requirements on employers; employers must maintain records documenting hours worked and earned sick leave used by employees for a period of five years.

Takeaway for Employers

Although the Act does not go into effect until October 29, 2018, employers should use this time to revise their handbooks and sick leave policies. As the Act affects virtually every New Jersey employer, we encourage you to contact us for assistance in complying with the Act.

* * *
If you have any questions regarding this alert, or any other issue, please do not hesitate to contact us.
212-682-0020 | PutneyLaw.com.