Oct. 29 — mark that date on the calendar. That's when New Jersey becomes the 10th state in the nation to require mandatory paid sick leave.
Gov. Phil Murphy signed the Paid Sick Leave Act into law in May and with roughly six weeks until it goes into effect, lawyers say employers should be dusting off their old policies for review to ensure that they are in compliance.
“It’s going to require employers to brush up on a lot of their currently existing sick leave and paid time-off policies,” said Alex Lee, associate at Einhorn, Harris, Ascher, Barbarito & Frost PC in Denville. “For employers that did not previously provide any kind of sick leave, they’ll have to create policies from scratch. For those who already have them, they need to make sure they provide leave according to the minimum requirements.”
The law requires one hour of benefit time for every 30 hours of work to be given on an accrual basis or front-loaded to the beginning of a year. Employers cannot be required to provide more than 40 hours of paid sick time per year per employee, but the law delineates a variety of reasons employees can take leave that may not have been intuited in previous policies.
Not only does the new law cover sick time in the traditional sense, but also that which is needed to attend a child’s school-related meeting or function; if a child’s school is closed; for preventative care, diagnosis, care, treatment of, or recovery from mental or physical illness; for care of a family member; and if an employee or family member is the victim of domestic or sexual violence.
“For some of those, a typical traditional sick absence policy might not cover it. That might be under a personal day, and some employers might not have personal days,” said Kelly Bird, director of the employment and labor law department at Gibbons PC in Newark. “Or an employee might have to take a vacation day for a conference at school. I think this is an effort to recognize that life happens. It’s not just about the flu or a migraine headache.”
What constitutes a family member under this law is a departure from what many employers would traditionally describe as such, so they also need to check their policies for their own definition and modify it to include anyone whose close association with an employee could be considered the equivalent of a family relationship.
“It’s not necessarily susceptible to proof. It’s not like a marriage license or birth certificate,” said Bird.
In addition to evaluating current policy, Angelo Auteri, senior associate at Scarinci Hollenbeck, suggests employers provide in-person notification of the law to their employees; written notification is required by the state within 30 days of the effective date.
“There’s some confusion here,” Auteri said. “To ensure the efficient administration of it, not only for employees but also management, I think [businesses should have] meetings and a written policy, possibly as well as internal management meetings, to let them know how it’s going to be applied and to ensure its uniformly applied, and to notify all of their employees that this is going to be uniformly applied regardless of any protected classes.”
That’s another part of the legislation that employers need to keep in mind — there are almost no exceptions. Unlike New Jersey discrimination laws, it doesn’t apply only to protected classes. And unlike the Family Medical Leave Act, this law makes no exception for small businesses and even one employee at a company requires an employer to provide the benefit.
Among the few exceptions: Employees performing services under contract pursuant to a collective bargaining agreement are exempt from the law until their bargaining agreement expires. It also doesn’t apply to per diem health care employees working for a fee, or public employees who are already required to have paid sick leave.
Another issue employers may run into with the new legislation is record-keeping and organization. Employers must now keep track of hours worked and benefit hours earned, and keep these records for five years. Auteri suggests giving employees a periodic breakdown of their benefit hours as they accrue, perhaps once a month.
“It’s difficult for many employers, especially smaller ones in some areas like restaurants for example, to keep track of everyone’s hours,” he said. “But keeping track of the hours are going to be critical because that’s how they accumulate paid leave time. ‘Here’s how many hours you worked last month, here’s how many paid sick leave hours you’ve earned and are available to you.’”
Failure to comply with the new law comes with the possibility of serious consequences. Businesses will be fined $250 for a first offense and $500 for any subsequent offenses, with the possibility of time in prison and additional penalties imposed by a judge due to a private lawsuit.
“And like a lot of other statues, there is an anti-retaliation clause, and retaliation claims can be more problematic for employers,” said Jim Boyan, partner at Pashman Stein Walder Hayden PC. “This law in particular created rebuttable presumption that if an employee is terminated within a short time period of taking paid leave, it’s going to be assumed that the adverse action is in retaliation and then it’ll be the employer’s burden to show it was for another reason.”
Though the new law presents an additional cost to some businesses, Einhorn Harris’ Lee suggested that opting to front-load paid leave for employees cuts down on man hours required for calculation and monitoring and therefore may be cheaper than the accrual method. And for any part-time employees, Gibbons’ Bird made the point that it will take a while for them to earn even a full day off at the one benefit hour per 30 worked rate.
“I think that layered onto that, if we’re talking about illness or diagnostic care or anything that’s significantly distracting, when we have an employee who’s at work and not feeling well or distracted, they’re not actually getting the job done fully,” Bird said. “If we allow them to take care of themselves or their beloved family members for an hour or two hours as needed, we’re investing in our human capital, which I think is a worthwhile investment.”