On May 2, 2018, Governor Murphy passed the first state-wide paid sick leave legislation in New Jersey. This new law clearly outlines new uniform requirements for paid sick leave and time off policies that New Jersey employers must comply with. The statute becomes effective on October 29th, 2018. All existing paid time off policies must now meet the minimum requirements of the new law and those employers without one must create one to comply with the requirements outlined. We at Mazur and Associates understand that for small businesses it is often difficult to keep up with the ever-changing legal requirements, so we have outlined and highlighted the parts of the bill that affect employers and employees alike.
• All New Jersey employers, regardless of size, must give one hour of paid sick leave per every 30 hours worked by each covered employee, even if they are a temporary employee.
– Exclusions include: Construction workers with collective coverage, healthcare and public employees with paid sick leave benefit packages
• Employees can accrue up to 40 hours of paid sick leave per benefit year
– A “benefit year” is a 12 month period set by the employer. Once a benefit year is established, it cannot be changed without going through the Commission of the Department of Labor and Workforce Development regulation.
• Employers can “front load” and pay employees their yearly 40 hours sick leave in advance at the beginning of the benefit year
• Employees hired on or before the effective date may start accrual on the effective date (October 29th, 2018)
• Employees hired after the effective date start accrual upon employment
– Employees, whether they were hired before or after the effective date, may not use their sick time until 120 days after the effective date.
• Employees can carry over up to 40 hours of paid time off from one benefit year to the next.
• Employers can “buy back” paid sick leave hours from employees
– Employees can accept full or half of the payment equal to their accrued paid sick leave at the end of the benefit year and have any remaining hours roll over into the next year.
• Approved reasons for taking paid time off are:
– Diagnosis, care, or treatment for: personal mental or physical illness, a family member’s* mental or physical illness, domestic abuse or sexual violence suffered by the employee or a family member.
– Time off needed because: the employee is not able to work because of the closure of the employee’s workplace, or the school or daycare of a child of the employee, the employee must attend school-related conferences, meetings, functions or other events requested or required by a child’s school, or to attend a meeting regarding the care provided for the child’s health conditions or disability
*A family member is a child, grandchild, sibling, spouse, domestic partner, civil union partner, parent or grandparent of an employee or a spouse, domestic partner, civil union partner or a parent or grandparent of the employee, or a sibling of a spouse, domestic partner or civil union partner of the partner under this new law.
• If the reason for taking paid time off is foreseeable or planned, employers may require up to seven (7) days’ notice and the employee must make their best effort not to disrupt the employers operations with the timing of their absence.
• If the reason for taking time off is not foreseeable, notification of leave is required as soon as possible.
• If leave is three (3) days or more in a row, employers may require documentation to prove that the paid time off is being used lawfully and for one of the approved reasons.
• Employers are not required to pay accrued hours to employees upon termination. Resignation, or other forms of separation from work and the business.
• Employers are required to keep documentation of hours worked and hours of sick leave taken for five years.
– If records are not kept, it is assumed that the employer is non-compliant with the law.
• Employers must distribute materials on the new requirements concerning paid time off provided by the Commission of New Jersey Department of Labor and Workforce Development.
• Employees who file and win civil court cases against an employer who was not compliant with the New Jersey Wage and Hour law are entitled to double damages.
• Employers can not retaliate against an employee for using his or her sick hours
– For example, counting a paid sick day as an absence from work that results in disciplinary action is not allowed
• Employers cannot take action against an employee within 90 days of said employee
– filing a complaint alleging a violation
– reporting or cooperating with any person investigation a violation
– opposing any unlawful policy or practice under the act
– informing any individual of their rights under the act
• Employees are entitled to their accrued hours even if employers change during the benefit years.
Our suggestion to all employers is to review your current paid sick leave policy or other paid time off policies in place to ensure that they meet the minimum requirements of the earned sick leave act. Employers with a separate sick and vacation leave policy might want to think about using a Paid Time Off bank in order to lessen some of the impacts the new requirements can have on the administration. Those without a policy on paid sick leave must create and implement a new policy that complies with the new act before the effective date.
At Mazur and Associates, Certified Public Accountants and Business Advisors, we have the business management expertise to guide your Company! We would be pleased to discuss some planning ideas that your Company may consider implementing before the law’s effective date of October 29, 2018. Call us at (732) 936-1230 to schedule a consultation with one of our CPA-Advisors.
Not taking action by October 29th would be a huge mistake!