On Sept. 26, 2018, the New Jersey Department of Labor and Workforce Development (NJDLWD) issued proposed rules to assist employers in compliance of the NJ Paid Sick Leave Act (Act), which goes into effect on Oct. 29, 2018. The proposed rules provide additional clarity with respect to the Act’s requirements, including the calculating and recording of earned sick time, employer notice requirements, and potential penalties for noncompliance.
As we discussed in a previous Compliance Corner article, the Act was originally signed on May 2, 2018, and requires employers, regardless of size, to provide earned sick leave to each employee working in NJ and outlines the way that sick leave is to be accrued, advanced, used, paid, paid out and carried over. In NJ, the earned sick leave may be used to cover:
- An employee’s own medical needs or the medical needs of a covered family member
- Certain needs resulting from the employee, or a family member of the employee, being a victim of domestic or sexual violence
- An employee’s inability to work because of a closure of the employee’s workplace, or the school or place of care of a child of the employee, due to a public health emergency
- Time needed by an employee to attend a child’s school-related conference, meeting or event as requested or required by the school
Eligible employees must accrue paid leave at a rate of at least one benefit hour per 30 hours worked.
Some notable provisions within the proposed rules include the following:
- The definition of “benefit year” may be any period of twelve consecutive months as established by the employer. Though a subsequent change to the “benefit year” is permissible, the employer must provide written notice to the NJDLWD at least 30 calendar days prior to the proposed change. The notice must include the reason for the proposed change, and a list of current employees with corresponding contact information and a history of accrual, use, payment, payout, and carry-over of earned sick leave for each employee for the preceding two benefit years. If the proposed change is identified as preventing the accrual or use of earned sick leave by an employee, then the Commissioner can impose a benefit year on the employer and deny the proposed change, subject to an appeal process.
- The definition of “family member” is expansive and includes a child, grandchild, sibling, spouse, domestic partner, civil union partner, parent, or grandparent of an employee, or a spouse, domestic partner, or civil union partner of the employee, or any other individual related by blood to the employee or whose close association with the employee is the equivalent of a family relationship.
- A “close association” includes any person with whom the employee has a significant personal bond that is, or is like, a family relationship, regardless of biological or legal relationship.
Use and Documentation of Paid Sick Leave
- Current employees must begin accruing earned sick leave as of Oct. 29, 2018 and employees hired on and after Oct. 29, 2018 must begin accruing earned sick time immediately upon employment. Though the law goes into effect Oct. 29, 2018, an employer isn’t required to allow employees to use their earned sick leave until Feb. 26, 2019 (120 days after the Act’s effective date of Oct. 29, 2018).
- When an employee is terminated, laid off, furloughed or otherwise separated from employment, but is reinstated or rehired in NJ by the same employer (or successor employer) within six months of separation, any unused earned sick leave accrued by the employee before the separation must be returned to the employee upon rehire and reinstatement.
- For exempt employees, an employer isn’t required to maintain records documenting the hours, but instead has the option of either recording the actual hours worked by that employee for the purpose of calculating earned sick leave accrual or presuming, solely for the purpose of calculating earned sick leave accrual, that the employee works 40 hours per week.
- All requests by employees to use earned sick leave shall be treated by the employer as presumptively valid. If the employee’s need to use earned sick leave is foreseeable, then the employer may require advance notice, but such notice cannot exceed seven calendar days prior to the first date of leave. If the employee’s need to use earned sick leave is not foreseeable (that is, not reasonably anticipated), then the employer may require an employee to provide notice as soon as practicable, but in order to require such notice, the employer must have already notified the employee of this notice requirement.
- An employer may also prohibit an employee from using earned sick leave on certain dates as long as such dates are limited to verifiable high-volume periods or special events that would disrupt employer operations. The rules include examples of a high-volume period, such as holiday travel for the airline industry, or the day or week in which a new product first becomes available for the manufacturers of retail products.
- The proposed rules also provide guidance for an employee that has two or more different jobs with the same employer or where employees are paid overtime, on commission, with tips or on a piecework basis.
- Employers must post a notice regarding employee rights and responsibilities under the Act in places accessible to all employees. The notice requirement is satisfied if the employer posts the information on the employer’s internet or intranet site or sends the notice through email.
Violations and Administrative Penalties
- A violation of the Act is considered a violation of a “state wage, benefit and tax law” that empowers the NJDLWD Commissioner to direct a suspension or permanent revocation of one or more licenses held by an employer.
- An employer that knowingly and willfully violates the Act would be subject to a fine of not less than $100 and no more than $1,000 and/or not less than ten days and no more than 90 days of imprisonment for the first offense. Upon a second offense, the fine would be no less than $500. Separately, if the NJDLWD Commissioner finds that an employer has violated the Act, they would be able to assess and collect administrative penalties in the amount of $250 for the first violation and between $250 and $500 for a second violation. Each week during which an employee has not been provided the amount of sick leave required by the Act constitutes a separate offense.
NJ employers should review their earned sick leave policy to make sure that they’re compliant before the Act becomes effective on Oct. 29, 2018. Employers that already offer paid time off (including personal days, vacation days and sick days) will be compliant under the law, provided the accrual rate is at least as generous as described under the law, all eligible employees are provided leave and employees can use their earned sick time for the same permissible purposes provided in the Act.
A public hearing regarding the proposed rules is scheduled on Nov. 13, 2018, and the NJDLWD is also accepting written comments until Dec. 14, 2018.
Proposed Rules »