On May 2, 2018, newly elected Governor Phil Murphy signed into law a statewide mandatory paid sick leave law. The law went into effect for all employers in New Jersey with an effective date of October 29, 2018. The law will require every employer in the State – regardless of size, to provide covered employees with up to 40 hours per year of paid sick leave. Below are the general details of the law:
Covered Employees – the law essentially applies to ALL employees – whether they are employed full time or part time. It also covers seasonal employees, as well as household employees. It does not apply to per diem (hospital) healthcare employees, construction workers employed under a collective bargaining agreement or public employees who already have sick leave benefits under existing New Jersey law.
How is Leave Accrued? – for every 30 hours an employee works, they are entitled to one accrued hour of sick time. If you have somebody that works 40 hours a week, after 3 weeks, they will have accrued four (4) hours of sick time. (40 hours x 3 weeks = 120 hours /divided by 30 = 4 hours of sick time). Conversely, if you have somebody that works six (6) hours per week, after five weeks, they will have accrued one (1) hour of paid sick time. This applies to part time workers, seasonal workers, etc. It does not apply to consultants or sub-contractors who are not on your payroll (i.e. if they receive a 1099 and NOT a W-2).
How Can Sick Time Be Used? – an employer is not required to permit an employee to use more than 40 hours per year. The employee can use accrued sick time after their 120th day of employment for any of the following reasons:
- Diagnosis, treatment, and recovery of an employee’s own mental or physical illness – including preventative care.
- Aid or recovery of a covered family member during diagnosis, care, treatment, or recovery from the family member’s physical or mental illness, including preventative care.
- Care, treatment, counseling, relocation, or participation in legal services in relation to the employees or family member’s status as the victim of domestic or sexual abuse.
- Closure of an employee’s workplace, or a school/childcare facility of an employee’s child, due to a public official’s order relating to a public health emergency.
- Time to attend a meeting request or required by school staff to discuss a child’s health condition or disability.
Carryover or Payout of Unused Sick Time:
- The law allows an employee to carry over up to 40 hours of previously accrued sick time to future periods. An employer is NOT required to carry over any more than the 40 hour requirement.
- Buyout – the employer may offer (but is not obligated) to pay employees for their unused accrued sick time in the last month of the year. If offered, the employee must be given the choice to receive either 50% or 100% of the unused accrued sick time. The payout will be at the employee’s then prevailing rate of pay. Salaried employees are paid at their base pay rate assuming 2,080 hours of work per year (52 weeks at 40 hours per week).
Transfer, Separation, and Reinstatement:
- If the employee is transferred to a separate division within the same company, or the company is sold or acquired, the employee is entitled to carry their unused accrued sick time to the new division or employer.
- If an employee is terminated, leaves voluntarily, retires, or separates for other reasons, the employer is NOT required to pay the employee for unused accrued sick time.
- If the employee returns to the company within six months, all unused and accrued sick time must be reinstated.
Other Conditions of Note:
- The employer may dictate in what increment sick time may be used. For instance, if an employee is scheduled to work four hours, the employer can require the employee to use four hours of sick time. They cannot require the usage of eight hours (or anything more than the scheduled shift time)
- Employers may require advance notice (not to exceed seven calendar days) for the use of foreseeable absences.
- Employers may require employees to make a reasonable effort to schedule a foreseeable event in such way to not unduly disrupt the operations of the Company.
- Employers may prohibit employees from using foreseeable sick time on certain dates and require reasonable documentation if sick leave is used on those dates.
- If the employee is absent three days or more, the employer is allowed to require documentation that the employee used sick time for a covered purpose.
- There are thirteen municipalities in NJ, that already have paid sick time ordinances. This act supersedes all of them.
- The New Jersey Department of Labor has released a poster, available for posting in the workplace, explaining the new law.
As always, I feel the need to add my two cents. I have no issue with paid sick time for full time employees. However, I believe that when you employ somebody on a part time or even seasonal basis it is absurd for an employer to have to pay for sick time for such workers. The record keeping alone for small business owners is entirely too cumbersome and the potential for abuse is extensive. Once again, our government has put the rights of the employee ahead of those of the small business.
Small businesses are the life of this country – and more specifically, this State. To continue to enact law after law after law, which makes it harder and harder for the small business to survive in this State is short sighted at best, and negligent at worse. Businesses of any size, leaving the State, is never a good thing. High business taxes and high unemployment are staples of the economic environment in this State and always have been. An increased minimum wage, which will eventually necessitate paying unskilled labor $15 per hour for the most mundane of jobs is about as unfriendly to businesses as you can possibly get. Yet, our so-called leaders continue to do everything possible to ensure that we will continue to lose jobs to other States. What’s next – a “rain tax”? …oh wait, yes, they’re considering that as well….
Here’s a newsflash for the politicians in this State – somebody has to pay for all the handouts you continue to create. Many businesses are getting fed up with always being the ones paying for your continued handouts. If your ultimate goal is to have record-level unemployment, keep doing what you are doing. We have already seen a mass exodus of businesses from this state – laws like this will just make it worse. Unfortunately, the voters in this State continue to elect these Socialist leaning officials without any regard to the environment it creates for business owners. Slowly, but assuredly, those business owners are getting disgusted with the lack of respect and concern exhibited by the leaders of this State for their plight. It’s time for our “leaders” to wake up -before it’s too late!!
As a fellow small business owner, our office isn’t going anywhere. We’ve spent the last 18 years helping New Jersey business owners succeed – and we’ll continue to do so. We will continue to be here to help you, the small business owner, in any way we can. Call us at (973) 276-0833 and we’ll be happy to help you navigate the sea of red tape and pitfalls that are constantly being tossed at you by the powers that be.