Are you a New Jersey based business owner with employees? Beginning Oct. 29th, the New Jersey Paid Sick Leave Act will require New Jersey employers of ALL sizes to provide up to 40 hours of paid sick leave per year to covered employees.
Who is considered a Covered Employee?
The act applies to most employees working in the state "for compensation." The act expressly excludes employees in the construction industry employed under a collective bargaining agreement, per diem healthcare employees, and public employees who already have sick leave benefits. The act broadly applies to any business entity, irrespective of size, that employs employees in the state of New Jersey, including a temporary help service firm. It expressly excludes public employers required to provide their employees with sick leave.
How Is Leave Accrued?
The act requires employers to designate any period of 12 consecutive months as a "benefit year." Employers cannot change the established benefit year without first notifying the New Jersey Department of Labor and Workforce Development. Under the act, current employees begin accruing sick time on the effective date of the act. New employees hired after the effective date of the act begin accruing sick time on the first date of their employment.
In each benefit year, an employee will accrue up to 40 hours of sick time at a rate of one hour for every 30 hours worked.
Alternatively, an employer may "frontload" the full 40 hours at the beginning of the benefit year. Employers with existing paid time off (PTO), personal days, vacation days and sick-day policies may utilize those policies to satisfy the requirements of the act as long as employees can use the time off as required by the act.
What Are the Notice and Record-Keeping Rules?
Employers MUST post a notification of employees' rights under the act and provide employees with a written copy of the notice within 30 days after the department has issued a model notice and each time thereafter when an employee is hired or requests such a notice. Additionally, employers must retain records documenting hours worked by employees and paid sick time taken by employees for a period of five years and permit the department access to those records.
What Should Employers Do Now?
In anticipation of the effective date of this new law, you should review your paid time off, vacation or other paid leave policies to determine whether you will have to implement a paid-sick-time policy for any of your employees or amend your existing policies to ensure compliance with the act. You should also consider revising your employee handbooks to account for these changes.
To discuss further how your business may be effected, please contact JLD Tax at www.jldtax.com.