New Jersey Employers: are your sick pay and paid time off policies in compliance?

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DOL Issues Final Rules on Earned Sick Leave

The New Jersey Department of Labor and Workforce Development (“NJDOL”) recently issued Final Regulations governing the Earned Sick Leave Law (the “Act”). As you may recall from our prior Employment Law Alerts, the law requires all employers to provide 1 hour of Earned Sick Leave (“ESL”) for every 30 hours worked (up to 40 hours) per benefit year to their New Jersey employees.  CLICK HERE and HERE .  The NJDOL’s previously issued proposed regulations left employers with confusion in some areas.  In the Final Regulations issued last week, the NJDOL finally responded to 118 comments submitted by interested parties and clarified how employers must administer ESL. In this alert, we summarize the key comments addressed in the Final Regulations that may impact how employers have been implementing ESL.

1.        Must employers have a single benefit year for accrual of ESL?

No.  The NJDOL has now eliminated the requirement that an employer must establish a single benefit year for all employees. Employers can have multiple benefit years to allow ESL to be accrued on employee anniversary dates.

Key Takeaway : Employers no longer have to establish a single benefit year for all employees. ESL can be earned on an employee’s anniversary date.

2.        Can an employer comply with the Act by providing 40 or more hours of general Paid Time Off (“PTO”)?

Yes, but the NJDOL has now clarified that employers with a general PTO policy that permits PTO to be used for a variety of reasons beyond just sick time must now permit all of the general PTO to be used in accordance with ESL rules on usage, accrual, carryover, docu-mentation, retaliation, etc.

Key Takeaway : Absent a separate ESL policy, employers must treat all hours accrued under a general PTO policy in accordance with the ESL rules.  For example, employers with a general PTO policy cannot require longer notice periods for any PTO day beyond what is permitted under the Act. Employers must amend their general PTO policies to be com-pliant or separate out sick leave in another policy.

3.        Does the Act require all earned, unused sick time to be carried over to the next benefit year?

Yes.  The NJDOL said that it does not have authority through rulemaking to waive the carryover requirement for employers that advance 40 or more hours of sick leave.

Key Takeaway : To comply with the Act, employers must permit carry-over even if the employee will not be able to use the carried over sick leave that exceeds 40 hours.  Given this, it is advisable for all policies to explicitly mention the carry over, even if the employer front loads the full amount of sick time at the beginning of the benefit year.

4.        Can employees use ESL to attend their children’s non-educational events?

Yes.  ESL coverage for school plays, recitals, parties, or other “non-education events” will hinge on whether attendance has been “requested or required by a school administrator, teacher, or other professional staff member responsible for the child’s education”.

Key Takeaway: Employees arguably can use ESL for any school event to which they are “invited” to attend. Since parents are typically “invited” to such events, employers should permit usage for this reason.

5.        Can employees use ESL for snow days?

No. The NJDOL did not extend ESL coverage closings for “public health emergency” to include closing of a school or office due to a snowstorm or similar weather event.

Key Takeaway: Employees cannot use ESL for snow days.

6.        Is there a limit to the number of “blackout dates” employers can set?

No.  The NJDOL declined a commentator’s request to limit the number of or set specific criteria for blackout dates during which employees cannot use ESL.

Key Takeaway:  An employer can designate any day as a blackout date (meaning, a date where foreseeable use of ESL is not permitted and employee must provide documentation for unforeseeable use of ESL) so long as it can verify that it is doing so due to a high-volume or a special event during which permitting the use of foreseeable ESL would unduly disrupt operations.

7.        Can the employer require employees to use ESL?

No. An employer cannot require the use of ESL even if the employee is eligible for usage and the reason for absence is covered by ESL. In the case of temporary disability, if the employee chooses not to use ESL in favor of receiving retroactive benefits for the seven-day waiting period, the employer can require the employee to return any ESL paid.

Key Takeaway : Employers should have a set procedure by which an employee requests use of ESL. Employers cannot assume that employee wants to use ESL when they are out for a covered reason. Employers must give employees who qualify for temporary disability benefits the choice of whether to use ESL for the waiting period.

8.        Can an employer require a specific amount of notice before an employee may use ESL for unforeseeable leaves?

No. For unforeseeable leaves, an employer may only require notice as soon as practicable.

Key Takeaway : Even for unforeseeable leave for critical employees, employers may only require notice “as soon as practicable.” An employer cannot require any bright line amount of notice and policies should be carefully drafted in this area.

9.        Can an employer require a return-to-work note for absences that last less than 3 days?

Maybe. The answer to this likely depends on the reason for the absence.  While the Final Regulations explicitly permit health care employers to require caregivers who have communicable diseases to obtain clearance before returning to work, they do not provide additional guidance as to when other employees may be required to provide medical clearance.

Key Takeaway: Although employers may not require a doctor’s note to prove proper use of ESL for an absence of less than 3 consecutive days, where there is a legitimate concern about the spread of communi-cable diseases in the workplace, they may condition an employee’s return to work on receiving medical clearance from his/her treating physician.

10.    Is there anything else the NJDOL intends to revise?

Yes. The Final Regulations identify additional issues that the NJDOL intends to address through formal rulemaking, including:

Whether ESL applies to employees who work in New Jersey and other states. The NJDOL intends to propose that, if an employee routinely performs some work in New Jersey and either the employee’s base of operations or the place from which such work is directed or controlled is New Jersey, the employee will be entitled to ESL.
How to prorate ESL for part-time employees and employees who start in the middle of a benefit year for employers who front load ESL.

**If you have drafted or revised your PTO/sick policies in response to the New Jersey Earned Sick Leave Law, you are strongly encouraged to revisit the policies for compliance with the Final Regulations. Please reach out to NFC for assistance.


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