Employers Association of New Jersey Earned Sick Leave Questions & Commentary May 24, 2018 A1827

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1 Emplyer/Emplyee Definitins Emplyers Assciatin f New Jersey Earned Sick Leave Questins & Cmmentary May 24, 2018 A1827 Emplyee means an individual engaged in service t an emplyer in the business f the emplyer fr cmpensatin. Emplyee des nt include a public emplyee wh is prvided with sick leave with full pay pursuant t any ther law, rule, r regulatin f this State. Emplyer means any persn, firm, business, educatinal institutin, nnprfit agency, crpratin, limited liability cmpany r ther entity that emplys emplyees in the state, including a temprary help service firm. Emplyer des nt include a public emplyer that is required t prvide its emplyees with sick leave with full pay pursuant t any ther law, rule r regulatin f this State. Questin: Will an emplyee wrking fr a Civil Service Municipality, wh is nt therwise eligible fr earned sick leave benefits under the civil service law, fr example a seasnal wrker, be eligible fr time ff under the Act? Questin: Will an emplyee wh perfrms wrk in the state fr an emplyer with n physical presence in the state be eligible fr time ff under the Act? In ther wrds, des the law apply t ut f state emplyers wh emply wrkers within the state? Questin: Will an emplyer with peratins in NJ be required t prvide an emplyee wrking ut f state, but wh is directed and cntrlled frm NJ, earned sick time under this Act? Questin: Which test will the Department f Labr and Wrkfrce Develpment (Department r DLWD) apply when determining if a wrker is an emplyee r an independent cntractr? ABC test, ecnmic realities test, IRS multi factr test? Hurs Wrked Sectin 2.a. requires, in part, Fr every 30 hurs wrked, the emplyee shall accrue ne hur f earned sick leave. (emphasis added). Questin: Will hurs wrked be cnsistent with the definitin used in New Jersey s Wage Hur law defined at 12:56 5.2? (12: (a) All the time the emplyee is required t be at his r her place f wrk r n duty shall be cunted as hurs wrked). Questin: Hw is an emplyer determine the number f hurs wrked fr emplyees fr whm recrding hurs wrked is nt therwise required (e.g. exempt emplyees)? Rate f Pay Sectin 2.c. requires, in part, The emplyer shall pay the emplyee fr earned sick leave at the same rate f pay with the same benefits as the emplyee nrmally earns EMPLOYERS ASSOCIATION OF NEW JERSEY

2 Sectin 3. c. requires the payut f accrued paid time at the end f the benefit year shall be based n the same rate f pay that the emplyee earns at the time f payment. Questin: It is nt uncmmn fr an emplyer t emply ne individual at multiple rates f pay. Fr example, an emplyee f a gym may be emplyed as a lifeguard at $11 an hur; a grup swim instructr at $12 an hur and a private swim cach at $13 per hur. At which rate wuld earned sick leave be paid ut when utilized? At which rate wuld it be paid ut at the end f the benefit year? Questin: Hw is an emplyer t determine the rate f pay fr emplyees wh are paid n a cmmissin basis, fee fr service basis r ther nn hurly methd f payment? Questin: Fr the purpse f determining the regular rate, shuld the emplyer cnsider vertime, shift differentials, ther premium rates r bnuses? Accrual and Carry Over Sectin 2.a. states, in part: The emplyer shall nt be required t permit the emplyee t accrue r use in any benefit year, r carry frward frm ne benefit year t the next, mre than 40 hurs f earned sick leave. (emphasis added) Sectin 3.d. requires, in part: If an emplyer freges the accrual prcess the emplyer shall either prvide t the emplyee a payment fr the full amunt f unused earned sick leave in the final mnth f the emplyer s benefit year r carry frward any unused sick leave t the next benefit year. Questin: If the emplyer frges accrual prcess and makes available the full cmplement f earned sick time n the first day f the benefit year, wuld the prvisin in Sectin 2.a. limiting use t 40 hurs in any benefit year apply? In ther wrds, when time carries ver at the end f the benefit year, wuld the emplyee have access t use mre than 40 hurs in the subsequent benefit year? Example: Emplyer freges the accrual prcess and frnt lads emplyees with the full 40 hurs f earned sick time at the beginning f the benefit year. Emplyee A utilizes 20 hurs f earned sick leave thrugh the curse f the benefit year. At year end, the emplyer pts t allw fr carry ver f the remaining 20 hurs. Will Emplyee A have available t use 60 hurs f earned sick leave (40 frnt laded + 20 carried ver) in the next benefit year? Questin: An emplyer has an existing plicy prviding fr unlimited paid time ff t be used by the emplyee as needed, e.g. illness, vacatin, persnal, etc. Assuming the plicy meets all f the minimum standards as defined by the Act, hw wuld the carryver/payut prvisins f the Act be met? EMPLOYERS ASSOCIATION OF NEW JERSEY 2

3 Frnt lading Earned Time Sectin 2.a. requires, in part, Fr every 30 hurs wrked, the emplyee shall accrue ne hur f earned sick leave, except that an emplyer may prvide an emplyee with the full cmplement f earned sick leave fr a benefit year, as required under this sectin, n the first day f each benefit year in accrdance with subsectin c. r subsectin d. f sectin 3 f this Act. Questin: Can an emplyer wh pts t frnt lad emplyees with earned sick time, as described in this sectin, pr rate the time prvided t emplyees wh wrk less than a full year? Fr example, when an emplyee is hired mid year, the emplyer will prvide a pr rated cmplement f earned sick time crrespnding t the pint in the year when the emplyee is brught n bard. Questin: Can an emplyer frnt lad certain emplyees with earned sick time while requiring thers t accrue the earned time? Example: An emplyer pts t frnt lad nging emplyees with earned sick time n the first day f each benefit year. Hwever, new hires wh jin the rganizatin after the start f the benefit year will accrue time in accrdance with the Act. The emplyer may then pt t transitin the new hire nt the frnt lading methd at the start f the next benefit year fllwing their hire date. Recrds & Dcumentatin Sectin 6. requires emplyers t retain recrds dcumenting hurs wrked by emplyees and earned sick leave taken by emplyees (emphasis added). Sectin 2.b. states, in part, An emplyer shall be in cmpliance with this sectin if the emplyer ffers paid time ff, which is fully paid and shall include, but is nt limited t persnal days, vacatin days, and sick days, and may be used fr purpses f sectin 3 f this act in the same manner prvide by this act and is accrued at a rate equal t r greater than the rate described in this sectin. Questin: Assume an emplyer s existing PTO plicy exceeds the requirements f the Act in all respects. The plicy des nt require, and management des nt ask, an emplyee t prvide a reasn fr their absence if they have time available, it is simply applied. Will the emplyer nw be required t ask fr the reasn fr the absence in rder t satisfy sectin 6. as stated abve (i.e. earned sick leave taken)? Nte: this is a typical n fault plicy. Questin: Hw will these recrdkeeping requirements apply t exempt emplyees a grup fr whm recrding f hurs wrked is nt therwise required? In ther wrds, des this Act create a new hurs wrked recrdkeeping requirement fr exempt emplyees? Benefit Year Transitin Benefit year means the perid f 12 cnsecutive mnths established by an emplyer in which an emplyee shall accrue and use earned sick leave as prvided pursuant t sectin 2 f this act, prvided that nce the starting date f the benefit year is established by the emplyer it shall nt be changed EMPLOYERS ASSOCIATION OF NEW JERSEY 3

4 unless the emplyer ntifies the cmmissiner f the change in accrdance with regulatins prmulgated pursuant t this act. (emphasis added) Questin: Will there be transitin guidance issued fr emplyers wh establish their benefit year as January thrugh December, r any ther 12 mnth perid which des nt cincide with the effective date f this act, Octber 29, 2018? Example: Emplyer establishes a benefit year f January 1 thrugh December 31 st. The emplyer pts t frg accrual and prvide the full cmplement f earned sick time n the first day f the benefit year (i.e. 1/1/19). What actins, if any, wuld be required t cmply with the act fr the perid f Octber 29, 2018 thrugh December 31, 2018? Prhibitin f freseeable earned sick leave n certain dates Sectin 5.b. states, in part, Emplyers may prhibit emplyees frm using freseeable earned sick leave n certain dates and require reasnable dcumentatin if sick leave that is nt freseeable is used during thse dates. Questin: Wuld it be acceptable fr an emplyer t establish, as a matter f plicy, that n earned sick leave may be used nce ntice f separatin frm emplyment has been given? (Example: nce an emplyee prvides tw week ntice f separatin, thse tw weeks becme black ut dates fr purpses f utilizing freseeable leave.) Questin: Is there any limitatin n the number f dates an emplyer can prhibit the use f freseeable earned sick leave? Example: Culd an emplyer establish, due t the demands f the business, the last week f each mnth a black ut perid fr which freseeable leave cannt be scheduled? 120 Calendar Days Sectin 2.a. requires, in part, the emplyee shall be eligible t use the earned sick leave beginning n the 120 th calendar day after the emplyee cmmences emplyment r the effective date f this act. Questin: Can an emplyer wh frges the accrual prcess and pts t prvide the full cmplement f earned sick at the start f the benefit year require new hires t wait the 120 calendar days befre utilizing their earned sick time? Different Plicies fr Different Grups Questin: May an emplyer establish different earned sick leave plicies fr different grups f emplyees, prvided each plicy meets the minimum requirements prvided fr under the Act? Fr example, an emplyer may establish a mre generus plicy fr managerial r ther exempt emplyees than fr nn exempt emplyees, prvided bth plicies meet the requirements f the Act? EMPLOYERS ASSOCIATION OF NEW JERSEY 4

5 Verificatin f Days Taken Sectin 5.b. requires, in part, Emplyers may prhibit emplyees frm using freseeable earned sick leave n certain dates and require reasnable dcumentatin if sick leave that is nt freseeable is used during thse dates. Fr earned sick leave f three r mre cnsecutive days, an emplyer may require reasnable dcumentatin that the leave is being taken fr the purpse permitted under subsectin a. f this sectin. Questin: In an instance where an emplyer requests verificatin f sick time taken as described by sectin 5.b. abve, may the emplyer delay the payut f the earned sick time until the verificatin is prvided by the emplyee? Paid Time Off Banks Sectin 2.b. prvides, An emplyer shall be in cmpliance with this sectin if the emplyer ffers paid time ff, which is fully paid and shall include, but is nt limited t persnal days, vacatin days and sick days, and may be used fr the purpses f sectin 3 f this Act in the manner prvided by this Act and is accrued at a rate equal t r great than the rate described in this sectin. Recmmendatin: We recmmend clarificatin thrugh regulatin. Prvided the emplyer s Paid Time Off plicy (PTO) meets r exceeds all prvisins f the Act, the emplyer will nt be required t prvide additinal PTO when the emplyee exhausts the time in their bank fr purpses ther than thse authrized under this Act. Example: An emplyer prvides 40 hurs f PTO that can be used fr any absence. Emplyee A utilizes the full 40 hurs fr a scheduled vacatin. If the need fr a sick day later arises fr Emplyee A, the emplyer will nt be required t prvide additinal time. Amy M. Vazquez Directr, Legal Cntent Emplyers Assciatin f New Jersey amy@eanj.rg (addendum added belw, June 2018) EMPLOYERS ASSOCIATION OF NEW JERSEY 5

6 Addendum June 2018 Existing Paid Time Off Plicies Sectin 2.b. states An emplyer shall be in cmpliance with this sectin if the emplyer ffers paid time ff, which is fully paid and shall include, but is nt limited t persnal days, vacatin days, and sick days, and may be used fr purpses fr sectin 3 f this act in the manner prvided by this act, and is accrued at a rate equal t r greater than the rate described in this sectin. (emphasis added) Questin: Hw will in the manner prvided by this act be interpreted? Fr example, will existing plicies prviding fr paid time ff be held t all f the requirements and standards utlined in the statute (e.g. recrdkeeping, carry ver, payut, 120 day waiting perid after hire, etc.)? Questin: Can an emplyer, whse PTO plicy exceeds all f the prvisins prvided fr by this Act, nly prvide pay ut and/r carry ver t the 40 hurs required by this Act? Standard Wrkweek Example: Cmpany PTO plicy prvides fr the full cmplement f 15 PTO days (120 hurs) at the start f the benefit year and time can be used fr any purpse, including fr cmpliance with this Act. Thrugh the curse f a benefit year, an emplyee nly utilizes 5 days (40 hurs) fr vacatin. Must the cmpany ffer t pay ut r carry ver the remaining 10 days (80 hurs)? Or can they cap the payut/carry ver at the 40 hur mark with the remaining being subject t a use it r lse it prvisin? Sectin 2.a. states, in part, Fr every 30 hurs wrked, the emplyee shall accrue ne hur f earned sick leave..the emplyer shall nt be required t permit the emplyee t accrue r use in any benefit year, r, carry frward frm ne benefit year t the next, mre than 40 hurs f earned sick leave. Questin: May an emplyer with a standard wrkweek f less than 40 hurs (e.g hurs, 35 hurs, etc.) cap the usage, accrual and carry ver t match their nrmal wrkweek? Example emplyer with a 37.5 hur standard wrkweek wuld allw emplyees t use, accrue and carry ver a maximum f 37.5 hurs. Prhibitin f freseeable earned sick leave n certain dates ( black ut dates) Sectin 5.b. states, in part, Emplyers may prhibit emplyees frm using freseeable earned sick leave n certain dates and require reasnable dcumentatin if sick leave that is nt freseeable is used during thse dates. Recmmendatin: We recmmend clarificatin thrugh explanatry examples cntained within the regulatins. EMPLOYERS ASSOCIATION OF NEW JERSEY 6

7 Example: Is there a limit n the number f dates during which the emplyer culd prhibit the use f freseeable sick leave? (e.g. nce per year; nce per mnth; nce per week). Example: Is there any limitatin n hw lng the black ut perids can be? (Fr example, can an emplyer prhibit the use f earned sick time during an entire mnth? Or during a full wrkweek?) Example: Must black ut dates be established in advance thrugh plicy r can they be established as the need arises? Example: Can black ut dates be weather related? (Fr example, emplyees in a call center wuld be prhibited frm utilizing freseeable sick leave during an anticipated snw strm s the emplyer can ensure prper staffing?) Example: Can an emplyer establish the last tw weeks f emplyment, after ntice f separatin has been given by the emplyee, as a black ut perid? Example: Can the day befre and the day after a hliday be black ut perids? Example: Can an emplyer establish black ut dates n a per emplyee, per incident basis? Full Cmplement Sectin 2.a. states, in part, Fr every 30 hurs wrked, the emplyee shall accrue ne hur f earned sick leave, except that an emplyer may prvide an emplyee with the full cmplement f earned sick leave fr a benefit year, as required under this sectin, n the first day f each benefit year in accrdance with subsectin c. r subsectin d. f sectin 3 f this act. Questin: What is meant by the full cmplement? Is the full cmplement the same fr a fulltime emplyee as fr a part time emplyee? Reasnable Dcumentatin Example: A part time emplyee is anticipated t wrk a 15 hur wrkweek. If the emplyer were utilizing the accrual methd (i.e. granting ne hur f earned sick time fr every 30 hurs wrked), the mst the emplyee wuld have earned in the year is 26 hurs (15 hurs per week x 52 weeks = 780 hurs. 780/30hurs = 26 hurs). Wuld the full cmplement be 26 hurs fr this individual? Example: Same scenari as abve, hwever, the emplyer is unable t anticipate the part time emplyee s schedule fr the year. Hw are they t determine the full cmplement? Sectin 5.b. states, in part, Emplyers may prhibit emplyees frm using freseeable earned sick leave n certain dates, and require reasnable dcumentatin if sick leave that is nt freseeable is used during thse dates. Fr earned sick leave f three r mre cnsecutive days, an emplyer may require reasnable dcumentatin that the leave is being taken fr the purpse permitted under subsectin a. f this sectin. This sectin ges n t describe what wuld be cnsidered reasnable dcumentatin under paragraphs (1), (2), (3), and (4) f subsectin a. EMPLOYERS ASSOCIATION OF NEW JERSEY 7

8 Questin: May the emplyer request reasnable dcumentatin when the leave is taken fr a purpse permitted under paragraph (5) f subsectin a.? (i.e. when the leave is taken in cnnectin with a schl related cnference, meeting, functin r ther event requested by a schl, teacher, etc.). This wuld likely nly arise if an unfreseeable sick day was utilized during a date freseeable leave was prhibited. Per Diem Wrkers Varius types f rganizatins and industries utilize the services f per diem emplyees. Typically, these emplyees are called up when wrk is available and they have the pprtunity t accept r decline the ffer f wrk n any given day with n repercussins. While the rganizatin will be able t track their hurs wrked and accrual rates f earned sick time, it is unclear hw the per diem emplyee will be able t actually use an earned sick day. Example: A lcal YMCA maintains a list f individuals wh are interested in prefrming varius types f wrk when available. When wrk is available, the cmpany ges dwn the list f interested individuals and reaches ut t check availability. If the individual expresses a desire t wrk n the date and time necessary, they wrk. If nt, the cmpany mves t the next individual n their list, with n repercussins t the individual unable t wrk. Because these individuals have cmplete cntrl ver whether they accept an assignment, it is unclear hw an earned sick day wuld be applied. Health care prfessinal Health care prfessinal is defined by the statute as any persn licensed under federal, state r lcal law, r the laws f a freign natin, t prvide health care services, r any ther persn wh has been authrized t prvide health care by a licensed health care prfessinal, including but nt limited t dctrs, nurses and emergency rm persnnel. Questin: Will individuals wh have earned certificatins thrugh extended curses f study be cnsidered t have met the definitin abve? 120 Calendar Days Sectin 2.a. requires, in part, the emplyee shall be eligible t use the earned sick leave beginning n the 120 th calendar day after the emplyee cmmences emplyment r the effective date f this act. Sectin 2.e. requires, in part, If an emplyee is terminated, laid ff, furlughed, r therwise separated frm emplyment with the emplyer, any unused accrued earned sick leave shall be reinstated upn the re hiring r reinstatement f the emplyee t that emplyment, within six mnths f terminatin, being laid ff r furlughed, r separatin, and prir emplyment with the emplyer shall be cunted twards meeting the eligibility requirements set frth in this sectin. Questin: Can the emplyer apply the 120 day waiting perid t a wrker rehired after a break in service f less than six mnths? EMPLOYERS ASSOCIATION OF NEW JERSEY 8

9 Disability Banks The Act requires either pay ut r carry ver f unused earned time in the final mnth f the benefit year. An emplyer s existing plicy allws fr carry ver f such time, hwever, it places the unused earned days int a disability bank fr emplyees which can be utilized in the case f a lng term disability. Wuld carrying ver time in this manner be acceptable? Full Accrual Sectin 2.a. states, in part, Fr every 30 hurs wrked, the emplyee shall accrue ne hur f earned sick leave..the emplyer shall nt be required t permit the emplyee t accrue r use in any benefit year, r, carry frward frm ne benefit year t the next, mre than 40 hurs f earned sick leave. Questin: When an emplyee reaches the maximum accrual f 40 hurs as prvided fr under the Act, des the accrual prcess stp? Hw will this wrk in a carry ver situatin? Example: Emplyee carries ver a full 40 hurs f accrued but unused time frm ne benefit year t the next. Thse 40 hurs f time are available fr use immediately in the next benefit year. Must the emplyer track the new accrual in the current benefit year since the emplyee is already at the maximum accrual amunt fr the year? Reasnable Dcumentatin Sectin 3.b. states, in part, Fr earned sick leave f three r mre cnsecutive days, an emplyer may require reasnable dcumentatin that the leave is being taken fr the purpse permitted under subsectin a. f this sectin. (emphasis added) Questin: Is three r mre cnsecutive days cnsidered calendar days? Or scheduled wrk days? Example: Emplyee s schedule is Mnday, Tuesday, Friday and Saturday. Emplyee calls ut sick Tuesday, Friday and Saturday. Wuld it be acceptable t ask fr reasnable dcumentatin fr these three absences which are separated by a nnwrking day? Waived Use f Earned Sick Time Under sme existing cmpany plicies, emplyees may pt t take unpaid days ff wrk, even if they have earned time available t them in their bank. The earned days wuld then remain in their bank and available fr use at a later pint in time. Is maintaining this type f plicy acceptable? Als, wuld the reverse be acceptable? Culd the cmpany adpt a plicy whereby if the emplyee has time available, and the emplyer knws they are ut fr a qualifying reasn, the emplyer will mandate that the time be applied t the absence? EMPLOYERS ASSOCIATION OF NEW JERSEY 9

10 Example: Emplyee calls uts sick n a Tuesday in March. They request that the emplyer nt apply an earned sick day even thugh such time is available. The emplyee wuld prefer t save their earned time fr an upcming scheduled medical prcedure in April. Example: Emplyee calls ut sick n a Tuesday in March and requests nt t be paid their earned sick time frm their bank. Can the emplyer require the use f such time if they are ut fr a qualifying reasn? Retaliatin Sectin 4. makes it an unlawful act fr an emplyer t retaliate against an emplyee because the emplyee requests r uses earned sick leave either in accrdance with this act r the emplyer s wn earned sick leave plicy, as the case may be, r file a cmplaint with the cmmissiner alleging the emplyer s vilatin f any prvisin f this act. Questin: A cmmn emplyer plicy surrunding hliday pay is that in rder t be eligible fr the hliday pay, the emplyee must wrk the day befre and the day after the hliday. If an emplyee subject t such a plicy utilizes an earned sick day the day befre r after a hliday, wuld it be cnsidered retaliatry fr the emplyer t withhld the hliday pay? EMPLOYERS ASSOCIATION OF NEW JERSEY 10