Attention New Jersey Employers: NJDOL Releases Final Regulations for Earned Sick Leave

The New Jersey Department of Labor and Workforce Development (“NJDOL”) recently issued final regulations regarding the New Jersey Earned Sick Leave Law (the “ESLL”).

As we previously reported, the law requires New Jersey employers to provide one (1) hour of paid sick leave for every (30) hours an employee works, up to a maximum of forty (40) hours of paid sick leave per benefit year.  Alternatively, employers may “frontload” the full amount of paid sick leave to employees at the beginning of the benefit year.  Employees may use paid sick leave for: (1) their own medical needs; (2) the medical needs of a covered family member; (3) the closure of the employee’s workplace or the employee’s child’s school or daycare facility due to a public health emergency; (4) to attend a child’s school-related conference or event; or (5) an absence arising from the employee or the employee’s covered family member seeking various services as a result of being a victim of domestic or sexual violence.

Right before the ESLL went into effect on October 29, 2018, the NJDOL issued proposed regulations in September 2018, which were open to a sixty (60) day public comment period.  Over one (1) year after the proposed regulations were issued, the NJDOL promulgated the final regulations regarding enforcement of the ESLL and responded to various comments submitted by the public, offering additional guidance regarding the NJDOL’s interpretation of the ESLL.  Much of the final regulations are identical to the proposed regulations and the previously issued Frequently Asked Questions.

Some of the more notable provisions of the final guidance include:

• The proposed regulations required employers to establish a single benefit year for all employees, thereby precluding employers from using employees’ work anniversary dates as a way to measure the benefit year. Under the final regulations, however, the NJDOL eliminated the single benefit year requirement, allowing employers to base the provision of paid sick leave on an employee’s anniversary date.
• Employers are permitted to adopt general paid time off (“PTO”) policies to comply with the ESLL. The final regulations clarify that all PTO provided under such policies must comply with the ESLL, including conforming to the requirements regarding carryover and notification procedures.  For example, the final regulations now clearly prohibit employers from carving out different notification requirements for use of PTO for sick leave purposes versus use of PTO for vacation purposes.
• The final regulations clarify that employees can use paid sick leave to attend their children’s non-educational events, including school plays, recitals or parties, so long as attendance has been “requested or required by a school administrator, teacher, or other professional staff member responsible for the child’s education.”
• The ESLL prohibits employers from enacting use-it-or-lose-it sick time policies and requires the carryover of up to forty (40) hours of unused accrued paid sick time into the next benefit year (unless certain payout procedures are offered). While not increasing the total amount of paid sick leave time an employee may use in the next year (an employer is never required to offer more than forty (40) hours of paid sick leave per year), this carryover requirement allows employees to use the carried over time at the beginning of the benefit year before they work enough hours to accrue that time.  The carryover requirement offers no practical benefit to employees who receive the full amount of paid sick time at the beginning of the calendar year as those employees already do not have to wait to accrue time before using paid sick leave.  Despite that reality, the NJDOL stated that it does not have the authority to waive the carryover requirement for employers that frontload paid sick leave in the final regulations.  Therefore, all employer policies must address the carryover requirement, even if the employer frontloads paid sick time to its employees at the beginning of the benefit year.
• The final regulations provide that a “public health emergency” does not include the closing of a school or office due to a weather-related event (unless in cases of natural disasters).
• Under the ESLL, an employer may prohibit employees from using foreseeable paid sick time on certain “blackout dates,” which are limited to verifiable high-volume periods or special events, during which permitting the use of foreseeable paid sick time would unduly disrupt the employer’s operations. Within the final regulations, the NJDOL declined to limit the number of “blackout dates” an employer can designate.

The NJDOL also announced that it intends to address additional issues regarding the ESLL through formal rulemaking, including:

• Whether the ESLL applies to employees working both in New Jersey and in other states. The NJDOL stated that it plans to adopt the existing New Jersey Division on Civil Rights standard in applying the New Jersey Family Leave Act for this purpose.  Specifically, the ESLL will likely apply to employees who routinely perform some work in New Jersey and the employee’s base of operations or place from which the work is directed and controlled is in New Jersey.
• The prorating of frontloaded paid sick leave for part-time employees or for employees who begin their employment in the middle of a benefit year.

Overall, the NJDOL’s most recent guidance covers a variety of additional specific topics, including, but not limited to, the application of the ESLL to unionized employees and the calculation of earned sick leave pay.  Employers should review their paid sick time or general PTO policies immediately to ensure compliance with the recent guidance.