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Paid Sick Leave is Now Law and This is What You Need to Know
May 2, 2018

Shareholder Elizabeth Garcia discusses the new Paid Sick Leave Act and what it means for employers and employees. 

Today, Governor Phil Murphy signed the much anticipated and controversial Paid Sick Leave Act. The act requires employers to provide one hour of sick leave for every 30 hours worked with a maximum accumulation of up to 40 hours in a benefit year.  Employers must establish a 12 consecutive month benefit year, which cannot be altered without providing notice to the Commissioner of Labor and Workplace Development. The employer also has the option of front-loading the 40 hours instead of following the accrual process.  The employer may also use a paid time off (PTO) policy so long as the PTO policy provides equal or greater benefits and accrue benefits at an equal or greater rate than the benefits provided under the act.

Unlike previous versions of the bill, the act applies to all businesses despite their size or number of employees. It also applies to most employees working in the state, except for per diem healthcare employees, construction workers employed pursuant to a collective bargaining agreement, and public employees who already have sick leave benefits.  Expressly included in the employee definition are employees of temporary services firms. In this case, the time accrues on the basis of total time worked with the temporary firm.

Employees may use sick leave to:

    • diagnose, care, treat or recover from the employee or their family member’s mental or physical illness;
    • seek preventative medical care for the employee or a family member;
    • in the case of victims of domestic violence, seek medical attention, seek legal services or to attend legal proceedings;
    • leave when an employee is unable to work due to closure of the workplace, or school or place of childcare by a public official due to an epidemic, public health emergency, or where there is concern that a health issue could jeopardize the health of others;
    • attend school-related conferences, meetings, and other functions requested by a school, teacher, administrator, etc., responsible for a child’s education.

The definition of family member is very extensive and includes individuals “whose close association with the employee is the equivalent of a family relationship.”  Employers can require advanced notice of foreseeable absences (up to seven calendar days in advance) and prohibit the use of foreseeable paid sick leave on certain dates. Documentation may also be requested by the employer for the use of paid sick leave for three or more days.

Employers also have some discretion in deciding the length of the increments of sick time employees may use, so long as the increment does not exceed the employee's scheduled shift. Employees cannot be forced to work additional hours, or to use accrued earned sick leave. An employer also cannot condition the use of accrued earned sick leave on the employee’s ability to find a replacement worker to cover the hours missed.

The law permits a sick leave payout in the final month of the employer’s benefit year for unused sick leave. If employees choose not to accept a payout, they may carry forward unused sick time up to 40 hours. Unless established in an employer policy or a collective bargaining agreement, unused accrued sick leave cannot be paid out at the time of separation from employment.

Employers will be responsible for notifying employees of their rights under the act by posting a notice issued by the commissioner.  There are also recordkeeping requirements that employers must follow, including documentation of hours worked and earned sick leave used by the employees.  The records must be maintained for five years. The sick time survives transfers, separation followed by a reinstatement within six months, and acquisitions by successor companies.

The act provides employees with a private right of action and contains non-retaliation provisions.

Employers have 180 days to review their PTO and sick leave policies to determine compliance. 

For more information, please contact the Employment and Labor Department.

The content of this post is for informational purposes only and should not be construed as legal advice or legal opinion. You should consult a lawyer concerning your specific situation and any specific legal question you may have.

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