On May 2, 2018, Governor Phil Murphy signed the New Jersey Paid Sick Leave Act, becoming the tenth State to enact a mandatory sick leave law. The Act preempts all local paid sick leave laws which were previously enacted in thirteen municipalities throughout the State. Moreover, the Act prohibits any New Jersey county or municipality from adopting “any ordinance, resolution, law, rule, or regulation regarding earned sick leave” after the law goes into effect. With limited exceptions, the Act is applicable to all New Jersey employers. The Act does not apply to public employees (as they are subject to separate leave laws), per diem health care workers and union construction workers.

To provide employers a period of time (180 days) to understand the law and become compliant, the Act’s effective date is October 29, 2018. Thereafter, accrual of sick leave will occur at the rate of 1 hour for every 30 hours worked, up to 40 hours per benefit year, permitting covered employees the ability to use earned leave 120 days following enactment and, for employees hired after October 29, 2018, 120 days following commencement of employment. Employees may carry over up to 40 hours of unused earned paid sick leave to the following year, but will only be able to use 40 hours of leave during any year. Upon separation from employment, unused earned paid sick leave need not be converted into compensation or time owed to employees, unless the employer has in place a policy or procedure which dictates otherwise.

The Act permits employees to use earned paid sick leave for any of the following:

1. Diagnosis, care, treatment of, or recovery from the employee’s mental or physical health condition, including preventive care
2. Diagnosis, care, treatment of, or recovery from a family member's mental or physical health condition, including preventive care
3. Time needed for employees or their family members’ condition as a victim of domestic or sexual violence, including counseling, legal services, or participation in civil or criminal proceedings
4. Closure of the workplace, school, or childcare by order of a public official due to a public health concern
5. Attendance at a school-related conference or meeting.

The Act expansively defines the term “family member” to include an employee’s “child, grandchild, sibling, spouse, domestic partner, civil union partner, parent, or grandparent of an employee, or a spouse, domestic partner, or civil union partner of a parent or grandparent of the employee, or a sibling of a spouse, domestic partner, or civil union partner of the employee, or any other individual related by blood to the employee or whose close association with the employee is the equivalent of a family relationship.”

In terms of compliance, a number of alternative options are available. Employers can monetarily compensate employees in the final month of any benefit year for the full amount of unused earned leave or up to 50% of the amount, with any accrued leave balance carrying over to the following year. Moreover, Employers can elect to forego the accrual process and instead frontload employees with the full complement of earned sick leave for a benefit year, on the first day of such year. For many employers that currently possess policies which offer employees paid time off, which includes sick days, such policies need to be updated to reflect and incorporate requirements under the Act.

For a leave of three days or more, an employer may require reasonable documentation to verify such leave is permissible. Following the Act’s effective date, Employers are required to provide reasonable notification of the Act to employees by conspicuously posting the notification in a place accessible to employees, as well as providing each employee with written notification.

Employers that do not comply with the Act, and/or retaliate against any employee who utilizes benefits under the Act, can be liable for back pay; liquidated damages, which doubles the amount of wages lost; and attorneys’ fees. Knowledge of the law, prevention and education are key components for employer success.