by Laura Crowley, CPA - Manager
On October 29, 2018, New Jersey employers must begin providing paid sick leave to their employees. The new law, formally known as the “New Jersey Paid Sick Leave” law, has broad implications for New Jersey employers and employees. “This is a significant change that will have an especially negative effect on small business owners in New Jersey, who rely on part-time staff for their business,” said New Jersey Managing Partner, Alex Serrano.
Under the new law, both full and part-time employees must begin to accrue paid sick leave at the rate of 1 hour per 30 hours worked, up to a maximum of 40 hours per year. Employers can opt to front-load the hours by making all 40 hours available on the first day of the year, instead of requiring employees to accrue the hours over time. When an employer makes this election, the employer does not have to allow employees to carry over unused sick leave to the following year. Without the election, employers must permit carryover of up to 40 hours of unused leave or, with the employee’s consent, payment in lieu of carryover at the end of each year. Employers can require that employees work for 120 days before permitting the employee to use any accrued sick leave, and can cap an employee’s annual paid leave taken to 40 hours per year.
The law preempts all existing state and local laws covering paid sick leave, and covers all employers, regardless of size. Only the following groups of employees are exempt: Construction workers covered under a collective bargaining agreement, per diem healthcare workers, and public employees subject to other paid leave arrangements. Employers who already provide paid sick leave may keep their existing policies as long as they at least meet the minimums required under the new law.
In addition to the provisions dictating how leave is earned, the law also provides for specific situations that qualify in order for employees to use the paid leave. Employees may use the paid leave for issues relating to physical and mental illness, affecting themselves or a family member, including the diagnosis, treatment, or care and recovery of such illness, as well as for preventive care. Leave can be used for circumstances resulting from the employee or a family member being the victim of domestic or sexual violence. Employees may also use the leave for situations in which there is a closure of the employee’s workplace or the place of care for an employee’s child due to an epidemic or other public health emergency. Finally, the employee may use the leave to attend a meeting requested or required by school staff in connection with the child’s health condition or disability.
New Jersey employers and employees should be aware that the law broadly defines ‘family member’ for purposes of the act to include the employee’s child, grandchild, sibling, spouse, domestic partner, civil union partner, parent, or grandparent. The term also includes the spouse or partner of an employee’s parent or grandparent, the sibling of the employee’s spouse or partner, and any person related by blood to the employee or whose close association with the employee is the equivalent of a family relationship.
All New Jersey employers should become familiar with the new law and how it will impact them. Employers should review current paid sick leave policies and determine if changes will be needed to comply with the new law, and understand the costs associated with the changes.