Employers Group Leans In on Earned Sick Leave

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Paid sick leave for all employees is no longer just a good idea for workers, it’s now the law in New Jersey.

While the regulations that implement the law are still in proposed form, the law went into effect on October 29th.

Although many employers remain convinced that the new requirements will impose administrative burdens, Amy Vazquez of the Employers Association of New Jersey says paid sick leave will soon become “business as usual” and fade into the background of everyday record keeping.

The law, which was signed by Governor Murphy in May requires employers to provide one hour of sick leave for every 30 hours an employee works, up to 40 hours per year. Murphy said 1.2 million workers, many in the food service industry, would now get sick leave where before they faced the choice of working sick or going without pay.

In 2015, the N.J. Business & Industry Association, New Jersey State Chamber of Commerce, New Jersey Food Council, New Jersey Restaurant Association, New Jersey Retail Merchants Association, and National Federation of Independent Businesses all sued unsuccessfully to stop Trenton’s sick leave law, but will now be preempted with all other municipal sick leave ordinances.

Ms. Vazquez, the Association’s director of legal content notes that employers have a choice about how to comply with the new law. They can either keep track of every worker’s hours and how much sick leave they accrue, doling out the leave in one-hour increments, or they can just award all 40 hours up front at the beginning of the year and save the paperwork.

As for whether businesses were going with the up-front leave or the gradual accrual, Vazquez called it a “mixed bag.” 

“I think many employers, especially for ones with larger part-time workforces, or those with more turnover per year, may be inclined to do the accrual method. Those with more of an established workforce might be more inclined to front-load the time all at the front of the year, recognizing that their employees might have needs … Also front-loading is a little less labor intensive.”

Vazquez says the law is written in such a way that employers who offer flexible “paid time off” models that combine sick and vacation time will be in compliance. Most employers already offer their workers sick leave or paid time off also known as PTO, she says.

“Many employers we’ve been dealing with already have sick leave policies in place, mostly part of a PTO policy” she says.

Ms. Vazquez has conducted multiple educational programs for Association members and continues, with other staff members, to field numerous calls on how to administer the law.

She says some employers have “started from scratch” to comply with the new law while others are simply modifying existing policies.

“A lot of EANJ members are already providing this benefit, so for them the hardship is altering their existing policies to make sure they are in compliance,” she said. “They may not have been offering it to their part-timers or temp employees, so they’re having to roll out the policy for those individuals. I think a lot of employers realize its good business. The difficulty is more now you have the government stepping in and you need to fall in line with what the law requires.”

Vazquez says she expects enforcement to be complaint-driven. However, she says, the Department of Labor might take a look at sick leave records if they are already investigating a business for other reasons, especially in “certain high-risk industries where employers may be trying to evade requirements of the other laws through worker misclassifications.”

Previous versions of the law limited the requirements to businesses of a certain size, but there is no size limit on the final law — any who count as an “employer” must provide sick leave.

There are still some ambiguities remaining in the proposed regulations, some of which will be determined by how the Department of Labor decides to enforce it.

Vazquez notes that the concept of a “benefit year” is proving tricky. The statute defines it as a period of employment of 12 consecutive months, with most employers tracking it beginning on the date of hire. However, she says, the DOL has indicated that employers should use a single date to establish a benefit year for all employees — a procedure the Association is seeking to clarify through the final rulemaking process.   

Final comments on the proposed rules are due no later than December 14th.  Read EANJ's Commentary here.