New Jersey Paid Sick Leave Update

Update: On October 8, 2018, the New Jersey Department of Labor and Workforce Development issued the official notice poster for Paid Sick Leave. The poster must be displayed in conspicuous and accessible places at each of its work locations informing employees of their rights and responsibilities. The Law also requires that new employees receive the written notice from their employers upon commencement of their employment (and that existing employees receive it by November 29, 2018).

The NJDOL also stated that employers must also provide copies of the written notice to employees upon request. Any employer found not to be complying with these laws may face monetary fines.

Please click here for the notice poster.

The New Jersey Department of Labor and Workforce Development (NJDOL) recently issued proposed regulations to implement the New Jersey paid sick leave law (PSLL), which goes into effect on October 29, 2018. The proposed regulations address many questions New Jersey employers have about the new law, but other areas of uncertainty still remain.

Existing PTO Policies: The regulations confirm that an employer’s existing paid time off policy will be in compliance with the PSLL if it complies with the accrual, use, payment, and carry over provisions of the PSLL.

Recordkeeping: Employers will be required to retain records of hours work by employees and earned sick leave taken by employees for five years and allow the agency access to the records. Violation of these requirements may be subject to penalties. The proposed regulations state there will not be a recordkeeping requirement for exempt employees.

Required Notice and Posting: The proposed regulations require each covered employer to post notification of the employee rights under the act in a conspicuous place that is accessible to all employees in each employer location. The proposed regulations state that the required notice may be provided by email, and the required posting may be posted via “an internet site or intranet site for exclusive use by its employees and to which all employees have access.” The New Jersey Department of Labor has not yet made the required notice/posting available.

Hours Worked: Under the proposed regulations for every 30 hours worked, the employee accrues one hour of earned sick leave.

Benefit Year: The proposed regulations state that the employer must establish a single benefit year for all employees. If the employer wishes to change the benefit year, the employer must supply the NJDOL with specified, detailed information, and the NJDOL can refuse the change if it determines the change is intended to prevent use or accrual of PSL.

Current Employees: The proposed regulations state that employees hired on or before October 29, 2018 must begin to accrue earned sick leave no later than October 29, 2018. Employees that are excluded from the employee definition are as follows; construction industry employees whom are under CBA, per diem health care workers, and public employees who have coverage under sick pay laws.

Foreseeable Need: The proposed regulations define what is meant by a “foreseeable” need for paid sick leave (“such as a scheduled doctor’s visit”)—which requires no more than 7 days advance notice.

Unforeseeable Need: The proposed regulations define what is meant by a need for paid sick leave that is “not foreseeable” and gives as an example “an employee wakes up in the morning with a fever and does not feel well enough to report for work that morning.”

Blackout Dates: The proposed regulations state that the blackout dates when an employer can prohibit the foreseeable use of paid sick leave: shall be limited to verifiable high-volume periods or special events, during which permitting the use of foreseeable earned sick leave would unduly disrupt the operations of the employer.

In addition, the proposed regulations state that “the employer shall provide reasonable notice to its employees of the blackout dates on which its employees are prohibited from using foreseeable earned sick leave.”

Rate of Pay. The proposed regulations address the rate at which employees must be paid when using paid sick leave and address the following scenarios:

• Where an employee has two or more different jobs for the same employer or if an employee’s rate of pay fluctuates for the same job, the rate of pay for earned sick leave shall be the amount that the employee is regularly paid for each hour of work as determined by adding together the employee’s total earnings, exclusive of overtime premium pay, for the seven most recent workdays when the employee did not take leave and dividing that sum by the total hours of work during that seven-day period.
• Where an employee is paid by commission, whether base wage plus commission or commission only, the employer must pay the employee during earned sick leave an hourly rate that is the base wage or the State minimum wage rate, whichever is greater.
• When an employee is paid on a piecework basis, whether base wage plus piecework or piecework only, to calculate the employee’s rate of pay for earned sick leave, the employer shall add together the employee’s total earnings for the seven most recent workdays when the employee did not take leave and divide that sum by the number of hours the employee spent performing the work during workdays.
• Where an employee uses earned sick leave during hours that would have been overtime if worked, the employer is not required to pay the overtime rate of pay.
• Where the amount of a bonus is wholly within the discretion of the employer, the employer is not required to include the bonus when determining the employee’s rate of pay for earned sick leave purposes.

The proposed regulations do not address every open question, but do address many. The NJDOL will accept comments on the proposed regulations for 60 days, until December 14, 2018, and the final regulations will be issued sometime thereafter.

Click here for New Jersey Paid Sick Leave bill text.

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This information is provided as a courtesy, may change and is not intended as legal or tax guidance. Employers with questions or concerns outside the scope of a Payroll Service Provider are encouraged to seek the advice of a qualified CPA, Tax Attorney or Advisor.