New Jersey Paid Sick Leave Law What Employers Need to Know Presented By: Alvaro Hasani, Esq. (908) 516-1058 ahasani@fisherphillips.com

Overview Effective October 29, 2018 Requires New Jersey employers of all sizes to provide up to 40 hours of paid sick leave per year to covered employees. Preempts local laws in Newark, Jersey City, East Orange, Paterson, Passaic, Trenton, Montclair, Irvington, Bloomfield, Elizabeth, New Brunswick, Plainfield and Morristown. Prohibits new local laws

Accrual and Use How is Paid Sick Leave Accrued? 1 hour for every 30 hours worked Can use PTO policies to satisfy requirements (policies must be as generous as the law or more) Can front-load the entire time Can limit accrual, use, and carryover to 40 hours of sick leave in a benefit year Need DOLWD permission to change benefit year Employees can use sick time after employed 120 days. Thereafter, they can use it as they accrue it.

Use of Paid Sick Leave How Can Paid Sick Leave be Used? Illness of employee or family member (physical or mental health) SAFE Act absences (involving domestic violence or sexual violence) Closure of business or school for public health emergency School meeting or meeting related to child’s health condition or disability Definition of “Family Member” Any individual related by blood to an employee Spouse, domestic partner or civil union partner of employee or an employee’s parent or grandparent Child or grandchild or legal ward of employee or employee’s spouse, civil union or domestic partner Parent or grandparent or person who stood in loco parentis of employee or employee’s spouse or civil union or domestic partner Sibling of employee or employee’s spouse, civil union partner, or domestic partner Any other individual whose association with an employee is equivalent to a family relationship

Use of Paid Sick Leave Increment of Use Employers can choose the increments in which its employees may use accrued sick time. However, the increment chosen may not be larger than the number of hours an employee was scheduled to work in a given shift. Cannot require employee to find replacement Can permit employee to work additional hours in workweek in lieu of using paid sick leave if voluntary

Buy-out and Carryover If Paid Leave Benefit is Front Loaded Employer chooses to Carry over up to 40 hours of unused, accrued sick time Pay out unused, accrued sick time

Buy-out and Carryover If Paid Leave Benefit is Accrued Employer can Carry over up to 40 hours of unused, accrued sick time Give employee the option of getting paid out instead Employee then chooses to either Receive pay out of all unused, accrued sick time Receive pay out of 50% of all unused, accrued sick time and carry over other 50%

Notice and Documentation Foreseeable Absences May require advance notice, not to exceed 7 calendar days. Employers may prohibit employees from using foreseeable sick leave on certain dates. Unforeseeable Absences As soon as practicable, provided that the employer has notified the employee of this requirement. Absences of 3 or More Consecutive Days May require documentation that confirms the employee used sick leave for a covered purpose

TRANSFER, SEPARATION, OR REINSTATEMENT OF EMPLOYMENT Transfer Of Employment To A Related Or Successor Employer the employee will retain and be entitled to use all accrued sick time. Separation Of Employment Unless the employer has a policy providing for the payment of accrued sick leave upon separation, it is not require to make such payment. Reinstatement Of Employment If employee is separated but then reinstated within six months, all of the employee’s unused and accrued sick time must be reinstated.  

Notice and Recordkeeping Notice must be posted Distribute Notice to employees 30 days after DOLWD issues form new hires when requested 5-year recordkeeping requirement Failure to document hours worked and sick leave taken or provide access to DOLWD = presumed violation

Anti-Retaliation Provisions Cannot count paid sick leave taken as an absence that may result in discipline, discharge, demotion, suspension, loss or reduction of pay, or any adverse action. Be careful with attendance polices! Protects employees who requests of uses paid sick leave, files DOLWD complaint, or informs another of rights Presumption of unlawful retaliation when adverse action with 90 days of internal or external complaint, advising anyone about a violation or rights, or cooperating with investigation or prosecution of rights.

Penalties Violation of Wage and Hour Law Administrative penalties Disorderly persons offense Fines Reinstatement and restitution Civil action Actual damages Equal amount of liquidated damages Attorneys fees and costs

Typical Questions How do I handle 2018? Does employer have to permit carryover if it fronts load sick or PTO? Can we have a use it or lose it policy? Can you treat employees differently based upon classification or service? What if employee has different rates of pay? Eligibility of temporary and seasonal employees. Does the law apply to exempt employees? How do you calculate sick leave pay for commissioned employees

Examples and Explanations Acme Corp. routinely hires student interns throughout the year to perform administrative tasks. Acme has wisely adhered to Fisher Phillips’ legal advice and paid their interns at least the minimum wage so as to comply with federal and NJ wage laws. However, Acme believes that it does not have to provide paid sick leave to their student interns because “that is not what the law intended for”, according to their CEO. Is the CEO right? What if interns were unpaid?

Examples and Explanations Acme believes that even though the new law goes into effect on October 29, 2018, none of their employees will be eligible to use paid sick leave in 2018 since they have to wait at least 120 days before they could start using it (or February 2019). Is Acme right? Thus, Acme has decided to not worry about 2018 and start complying with the law beginning in January of 2019. Is this wise?

Examples and Explanations In 2018, Acme provided all of its employees with 10 days of PTO time. Because Acme’s PTO policy offered more days off than the paid sick leave law, it believes it has met its burden under the law for 2018. Is that true?

Examples and Explanations Acme has advised its employees that their paid sick leave will run concurrently with FMLA leave. Because FMLA entitles employers to a 30-day notice for foreseeable absences, Acme has decided to impose this requirement upon employees that take paid sick leave concurrent with FMLA leave? Is this legally permissible?

Examples and Explanations An Acme non-exempt employee is scheduled to work 9:00 am to 5:00 pm. On Friday, at 4:00 pm the employee becomes ill and decides to take paid sick leave for the remainder of the day. Because Acme uses half-day increments (or 4 hours) for paid sick leave, it charges the 4 hours against the employee’s available bank. Can Acme do this even though the employee was absent from work for only one hour? When employee realized that she has been charged for 4 hours of sick leave, she demanded 1 hour of regular pay and 3 hours of overtime pay. Can Acme pay employee only for 1 hour of regular time even though it charged a total of 4 hours from available sick time? Or must Acme pay 1 hour of regular time plus 3 hours of overtime?

Examples and Explanations Acme has decided to front-load 50 hours of PTO (inclusive of sick leave) to all employees in January of 2019 and each year thereafter. Because under the new law employees can only accrue, use, and carryover a maximum of 40 hours of paid sick leave and because Acme provides each employee with 50 totals PTO hours in the beginning of each year, Acme has decided to not track or permit carryover of paid sick time to ease their administrative burden. Any issues with this strategy?

Examples and Explanations An Acme employee commonly works an 8-hour shift. On one particular day though, employee was asked to come in for a 3- hour shift. Employee called out sick and did not show up to work the shift. Acme charged the employee 4 hours of paid sick leave consistent with the half-day increment they chosen to use for paid sick leave purposes. Is this permissible?

Examples and Explanations In January of 2019, Acme hires a temporary employee for a 3- month assignment. Acme realizes that this employee will never get to use paid sick leave because employee will not be with the company for at least 120 days. Thus, Acme does not provide the employee with any paid sick time and does not track any accrual of such time. Good strategy? What if this temporary employee is re-hired within 6 months?

Examples and Explanations An Acme manager notices that one of his employees is sick at work. Because he does not want other surrounding employees to get sick, he tells the sick employee to go home and use his available paid sick leave. Did the manager do the right thing?

Examples and Explanations Acme has an employee that has different rates of pay depending on the job employee performs. Out of an abundance of caution, Acme pays the employee for earned sick leave at the employee’s higher rate. Good strategy?

Examples and Explanations Acme has an employee that is normally paid by a base wage of $10 per hour plus commission. Acme pays the employee for earned sick leave at the employee’s base rate of $10 per hour. Is this legal? What if the employee was normally paid on commission only?

Examples and Explanations Acme has an employee that is normally paid in gratuities, food, and/or lodging. How does Acme pay this employee for earned sick leave?

Examples and Explanations Because the new law requires that employers retain for a period of 5 years all records documenting all hours worked by employees and all time accrued, used, and carried over for sick leave purposes, Acme mandates that its exempt employees now keep track of hours worked. Is Acme right in doing so?

Alvaro Hasani, Esq. (908) 516-1058 ahasani@fisherphillips.com Final Questions? Presented By: Alvaro Hasani, Esq. (908) 516-1058 ahasani@fisherphillips.com