If you employ people in New Jersey, you will have a new Earned Sick Leave Notice of Employee Rights requirement that must be delivered no later than November 29, 2018.
New Jersey has become the tenth state to pass a statewide paid sick leave law. The New Jersey Paid Sick Leave Act (NJPSLA) went into effect on October 29, 2018. The period for written comment on the proposed rules will end on December 14, 2018. This means the final rules will most likely not become available until early 2019.
However, if you have employees in the state of New Jersey you should begin to comply with the proposed regulations—which includes a mandatory NJ Earned Sick Leave Notice of Employee Rights.
The New Jersey Paid Sick Leave Act (NJPSLA) also referred to as the New Jersey Earned Sick Leave Law (NJESLL) requires employers to provide up to 40 hours per benefit period of paid sick leave for employees. The paid hours can be either made available up front or can be accrued at 1 hour for every 30 hours worked. The employee may use paid sick leave for medical care which includes care for a family member, time to deal with domestic or sexual violence issues, to attend school events and/or conferences, and if an employer is closed due to a public health emergency.
What Employers are Affected?
Basically, most employers in the state of New Jersey should already be complying with the New Jersey Paid Sick Leave Act as of October 29, 2018. The proposed regulations provide the following definition of employer:
“Employer” means any person, firm, business, educational institution, nonprofit agency, corporation, limited liability company or other entity that employs employees in the State, including a temporary help service firm. In the case of a temporary help service firm placing an employee with client firms, earned sick leave shall accrue on the basis of the total time worked on assignment with the temporary help service firm, not separately for each client firm to which the employee is assigned. “Employer” does not include a public employer that is required to provide its employees with sick leave with full pay pursuant to any other law, rule or regulation of this State. “
It should be noted that the proposed regulations do not exempt small employers. Consequently, if you have one employee who works in New Jersey you will have to comply with the new law.
What about Remote Workers?
You might be asking yourself (or you should be if you’re not), what if I use remote workers who reside and work in New Jersey but my business is located in New York? At this point, the answer would appear to be you must comply:
“…that employs employees in the State.”
This wording seems to indicate that the business location is not what is used to define who must comply but rather where the employee actually provides the work.
In addition, the recently released FAQ by the NJDOL specifically states:
“7. Must an employer based outside of New Jersey provide earned sick leave to employees
who work in New Jersey?
Yes. Out-of-state employers with employees in New Jersey must provide earned sick leave to its
employees who work in New Jersey…”
“4. Does the Earned Sick Leave Law cover an employee who works for an employer that is
located outside of New Jersey, but who performs all of his or her work in New Jersey?
If you have a remote employee who works in New Jersey, you should either comply with the law for any affected employees or contact a local attorney to determine the best course of action. As my grandmother used to say, acting like an ostrich with a problem leaves your rear end available to be bit. Don’t leave yourself open to a possible investigation or lawsuit by ignoring these employees or the new law.
What about Multi-state Employers?
Multi-state employers who may have employees who temporarily work within the state or New Jersey employers who have employees who work temporarily outside of the state was addressed by the recently released FAQ:
“5. Is an employee who works both within New Jersey and outside of New Jersey entitled to
receive earned sick leave?
It depends. The answer to the question depends largely on how much time the employee spends working in New Jersey. If the employee routinely performs some work in New Jersey and the employee’s base of operations or the place from which such work is directed and controlled is in New Jersey, then the employee is entitled to receive earned sick leave under the Earned Sick Leave Law. This is the test applied by the Division on Civil Rights in its enforcement of the New Jersey Family Leave Act. The Department anticipates adopting the same approach through formal rulemaking.”
Don’t you love answers that start with the words “it depends”? While this answer gives guidance on employees who work for employers located in New Jersey, question 7 and question 4 (see previous section) seem to indicate that even if your company is not located in New Jersey, and if the employee works in the state, that employee would be eligible for earned sick leave.
I don’t think the question is fully answered yet because so far, we don’t know “how much time the employee spends working in New Jersey” is defined. If you have employees who only partially work in NJ, this would be the time to consult with an attorney familiar with New Jersey laws.
However, if you are a Multi-state employer that has a division of employees who work within the state of New Jersey then you would need to provide the earned sick leave benefit to these employees.
But I use Independent Contractors…
If you have employees that you have classified as Independent Contractors, now might be a good time to review them. In New Jersey they will use what is called the A, B, C test:
- Such individual has been and will continue to be free from control or direction over the performance of such service, both under his contract of service and in fact; and
- Such service is either outside the usual course of the business for which such service is performed, or that such service is performed outside of all the places of business of the enterprise for which such service is performed; and
- Such individual is customarily engaged in an independently established trade, occupation, profession or business.
You can use the Worker Classification Questionnaire that is used when an audit is performed by the state of New Jersey to help you determine if an Independent Contractor could be considered an employee. Of course, when in doubt you should always contact a local attorney who is familiar with the laws of the state. The last thing you want to do is end up in court when an Independent Contractor either asks about or reports you to the state for not providing the earned sick leave benefit required under the new law.
Are any Employees Not Covered?
The law exempts construction workers who are covered by a collective bargaining unit, per diem healthcare workers and public employees who are already covered under a paid sick leave policy.
How are Temporary Staffing Employees Handled?
The proposed regulations specifically state how employees who work for a staffing agency or PEO (Professional Employer Organization) should be dealt with:
“…earned sick leave shall accrue on the basis of the total time worked on assignment with the temporary help service firm, not separately for each client firm to which the employee is assigned.”
In other words, you can expect the price for utilizing staffing agencies to increase as they will have the responsibility to comply with NJPSLA. This will include providing the New Jersey Earned Sick Leave Notification of Employee Rights for the staffing services’ employees. Keep in mind though that you will have to provide the notice and handle the paid sick leave administration for your own employees.
When Does the Earned Sick Leave Notice Need to be Provided?
By November 29, 2018, the employer must:
- Post in prominent place(s) accessible to all employees in each of the employer’s workplaces
- Provide to each employee employed by the employer with a written copy of the notification
Going forward, the written notice must be:
- Provided at the time of the employee’s hiring
- Provided anytime when requested by the employee
How Does the Earned Sick Leave Notice Need to be Delivered?
If English is not the employee’s language, you must provide the notice in their native language. Currently the notice is available in the following languages:
- Haitian Creole
The Earned Sick Leave Notice can be distributed:
- At work directly to employees
- Using a company internet intranet (i.e. benefit portal) that all employees can access
- Using email
- Included in new hire packages and/or employee handbooks
Whatever method is used, you must ensure that all employees receive the written notice. I would also recommend that you retain documentation as to the distribution method used and if possible a list of employees who received the notice. This is not required by the law, but I always believe good documentation sometimes goes a long way in deterring a lawsuit.
It is unclear if an employer can make the ‘written notice’ different than the ‘model notice’ provided by the NJDOL and comply with the law.
“…the notification issued by the Commissioner…provide each employee a written copy of the notification referred to in (a) above…”
This wording suggests that the model notice provided by the NJDOL must be used as written by the Commissioner.
The problem with just providing the ‘model notice’ is that it won’t provide employees with all the information they will need. It also won’t protect situations where an employer can limit when earned sick leave can be used. In other words, if you don’t customize or provide employees with an additional notice of how the law will be administered by your company, confusion or worse misunderstandings can happen.
So, what should an employer do? I recommend that an employer provide a customized Earned Sick Leave Notice with the NJ Earned Sick Leave Notice of Employee Rights. The customized notice should:
- explain how the earned sick leave benefit will be administered including how earned sick leave will be accrued (Accrued Method or Advanced Method);
- how an employee must notify the employer of foreseeable and unforeseeable leave, dates that foreseeable earned sick leave cannot be used;
- how earned sick leave affects or doesn’t affect other paid time off or leave of absence procedures;
- and many other areas where an employer has made administrative decisions allowable under the law.
- Determine the benefit year you will be using. Be careful as you cannot change this going forward without approval from the Commissioner.
- Update the poster with the benefit year information and post it where all employees at each work location can see it.
- Create a customized written notice to distribute with the NJ Earned Sick Leave Notice of Employee Rights (model notice) to all employees as well as to provide to newly hired employees. You can just use the model notice provided by NJDOL, but we recommend you also include a customized notice to communicate your company policies.
- Review your PTO policies to ensure they do not conflict with the new law and modify them as needed.
- If you are a covered employer under federal FMLA or NJ Family Leave Act, review your procedures and impact of NJPSLA on your FMLA administration.
- Update your PTO procedures to reflect how you will administer the new law, for example will you front load or accrue paid sick leave, how will requests for earned sick leave be handled, how will unused earned sick leave be handled at the end of the benefit year, etc.
- Verify that your payroll vendor can track the earned sick leave earned and used. Also make sure it can provide reports with this information both on an aggregate and employee level.
- Update any employee communications and/or employee handbooks with new policies and procedures.
- Train Manager and Supervisory staff on the new law, including how to handle employee questions and how to administer the earned sick leave benefit for your company.
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