Late in October 2018, New Jersey’s Earned Sick Leave Law (ESLL) took effect. Under the ESLL, employees can accrue one (1) hour of earned sick leave for every 30 hours worked, up to 40 hours a year. In November 2018, the State held a public hearing at which it discussed some proposed rules to help employers and employees better understand the provisions set forth in the ESLL.
Finally, on January 6, 2020, the New Jersey Department of Labor & Workforce Development (the “Department”) issued regulations regarding the enforcement of the ESLL, including 118 separate comments and responses Although the final regulations contain minimal changes, the Department’s responses to the public’s concerns provide insight into how the Department interprets the law.
Please review our Compliance Update “New Jersey Enacts Paid Sick Leave” issued May 8, 2018 for a summary of the ESLL:
https://emersonreid.dmplocal.com/dsc/ collateral/021120_P_ERC_New_Jersey_Enacts_Paid_ Sick_Leave_Law_GEN.pdf
The following will discuss the final regulations issued this year.
Substantive Change: Benefit Year
In the final regulations, the Department clarified that an employer can establish multiple “benefit years” for employees rather than require each employer to establish a single benefit year for all employees. A benefit year is now defined as “the period of 12 consecutive months established by an employer in which an employee shall accrue and use earned sick leave.” In the comments, the Department explains that an employer may utilize
an employee’s anniversary year as the benefit year for purposes of the ESLL.
Issues Addressed in Comments
In the Department’s 118 comments and responses, a few clarifications were made on certain provisions of the ESLL. Below is a high-level overview of a few of these comments and is not intended to be an exhaustive analysis.
Collective Bargaining Agreements (Comments 1, 7, 73, 80, 94, 99)
The Department clarifies that employees represented by a union may accept earned sick leave benefits greater than or less than those provided in the ESLL or waive those rights as part of the collective bargaining process. The Department also interprets the ESLL as applying to the parties of an expired collective bargaining agreement immediately if not replaced by a new collective bargaining agreement.
Paid Time Off Policies (Comments 8, 9, 12, 65, 68, 72, 92)
When an employer is using a PTO policy to satisfy the ESLL’s requirements, the Department explains that to comply with the law, an employer’s PTO policy must: (a) permit an employee to use all of the PTO for reasons covered by the ESLL; (b) provide for accrual or advancement in accordance with the SLL’s requirements; (c) allow employees to use the time off in accordance with the ESLL; (d) provide for payment of sick time in accordance with ESLL; and (e) provide for payout or carryover in compliance with the ESLL. Employers using the PTO policy to satisfy the ESLL must also comply with all ESLL Requirements for all PTO hours including documentation, notice provisions, and prohibitions against retaliation.
FMLA (Comment 10)
The Department explains that the terms of the federal Family and Medical Leave Act (FMLA) do not conflict with ESLL. The ESLL prohibits an employer from requiring an employee to use available earned sick leave.
Non-Discretionary Bonuses (Comment 5, 67)
The Department states that non-discretionary bonuses must be included in the calculation of ESLL compensation. The Department did not explain how employers can include these bonuses in calculating the rate of pay for the ESLL.
Temporary Staffing Firms (Comments 54, 83)
The final regulations clarify that in the case of a temporary staffing agency placing an employee with client firms, earned sick leave shall accrue based on the total time worked on assignment with the temporary agency, not separately for each client firm to which the employee is assigned.
120-Day Waiting Period (Comment 2)
The final regulations confirm that an employee, shall not be eligible to use earned sick leave until the 120th calendar day after the employment commences.
40 Hour Maximum (Comment 7)
The Department clarified that an employer shall not be required to permit an employee to use more than 40 hours of earned sick leave in any benefit year, regardless of how many hours have been carried over.
The final regulations and guidance do cover many other specific topics; therefore, it is advisable to review the comments and responses in their entirety. Employers should evaluate their ESLL and PTO policies with labor counsel to ensure compliance.
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