New Jersey Passes Mandatory Paid Sick Leave

On May 2, New Jersey Governor Phil Murphy signed a law mandating all private and public New Jersey employers, regardless of size, offer paid sick leave. This makes New Jersey the 10th state to adopt mandatory paid sick leave legislation. The Paid Sick Leave Act (“the Act”) also permits employees to use the leave for their own care or for the care of a family member and expands how paid sick leave can be used, encompassing protections beyond the federal Family Leave and Medical Act, the New Jersey Family Leave Act as well as other leave laws. The new law also fully pre-empts the 13 municipalities in New Jersey with local paid sick leave ordinances, allowing employers to adopt a state-wide uniform paid sick leave policy.

Coverage

Permissible use of sick leave includes the following:

(i) Diagnosis, care, treatment, recovery and/or preventive care for the employee’s own mental or physical illness or injury or the employee’s family member’s mental or physical illness or injury;

(ii) Absence due to a public health emergency declared by a public official that causes the closure of the employee’s workplace or the school or childcare facility of the employee’s child or requires the employee or an employee’s family member to seek care;

(iii) A necessary absence for medical, legal or other victim services because of domestic or sexual violence perpetrated on the employee or the employee’s family member; or

(iv) To attend a school-conferences, meetings, or any event requested or required by a child’s school administrator, teacher, or other professional staff member responsible for the child’s education, or to attend a meeting regarding a child’s health or disability.

The Act also broadly defines “family members” to include an employee’s child, spouse, domestic partner, civil union partner, parent (including adoptive, foster or step-parent, or legal guardian), sibling (including foster or adoptive siblings), grandparent or grandchild, and the parent, grandparent or sibling of the employee’s spouse, domestic partner or civil union partner. Notably, an employee has the opportunity to use their sick leave for the care of a non-related individual whose close association with the employee is the “equivalent” of a family relationship.

Exemptions & Employees Covered by a CBA

Per diem healthcare employees, construction workers subject to a collective bargaining agreement (CBA), and public employees who are provided with sick leave with full payment pursuant to any other law, rule or regulation are exempt from the new law. Non-construction employees covered by a CBA at the time the law goes into effect are also not effect, but will apply once the agreement expires. Further, employees and their representatives may waive the rights available under the law and address paid leave in collective bargaining.

Accrual of Paid Sick Leave

Under the new law, employees accrue 1 hour of paid sick leave for every 30 hours worked. Employees may accrue up to 40 hours of paid sick leave per benefit year.  Employers are also permitted to designate the “benefit year” as any 12-month period but may not modify it without notifying the New Jersey Department of Labor and Workforce Development (NJDOL).

Employees become eligible to use earned sick leave beginning on the 120th day after they are hired, and may use their earned sick leave as it is accrued. Employers are also permitted to offer, or “frontload” 40 hours of paid sick time or utilize a paid-time-off (“PTO”) policy as long as it provides equal or greater benefits and accrue benefits at an equal or greater rate than the benefits provided under the Act. There is no requirement to payout accrued and unused sick leave upon termination absent a company policy to the contrary.

Upon the mutual consent of the employee and employer, an employee may voluntarily choose to work additional hours or shifts during the same or following pay period, in lieu of hours or shifts missed, but shall not be required to work additional hours or shifts or use accrued earned sick leave. In addition, an employer may not require, as a condition of an employee’s using earned sick leave, that the employee search for or find a replacement worker to cover the hours during which the employee is using earned sick leave.

Notice

Employers are entitled to 7 days advance notice of “foreseeable” absences and can restrict employee’s use of “foreseeable” paid sick leave on certain dates.  Where the need is unforeseeable, an employer may only require notice “as soon as practicable,” if the employer has notified the employee of this requirement.  In addition, employers are only permitted to ask the employee for documentation to substantiate the sick leave if the employee is absent for 3 or more consecutive days.

Compliance

Employers will be required to maintain records documenting the hours worked and earned sick leave used by employees. Records must be maintained for 5 years and made available for inspection by the NJDOL. If an employee claims an employer violated the Act, and that employer that has failed to maintain adequate records, then there is a presumption that the employer failed to provide paid sick leave.

Employers must also post a notification and distribute a written notification alerting employees of their rights within 30 days of the notice being issued by the NJDOL and provide the notification to all new employees at the time of hiring.

Anti-Retaliation

Employers are prohibited from retaliating or discriminating against employees under the Act. The Act broadly defines retaliation to include not only retaliatory personnel action like suspension, demotion, or refusal to promote, but also includes threatening to report the immigrant status of an employee or family member of the employee. Employers are also prohibited from retaliating or discriminating against an employee who files a complaint with the commissioner or a court alleging the employer’s violation of the Act, or informs any other person of their rights under the Act.

There is a rebuttable presumption of unlawful retaliatory action whenever an employer takes adverse action against an employee within 90 days of when that employee opposes any violation of the Act, informs any person about the employer’s alleged violation of the Act, files a complaint alleging a violation of the Act, or cooperates in an investigation into an alleged violation of the Act.

Penalties

Any failure of an employer to make available or pay earned sick leave as required by the new law, or any other violation of the law, shall be regarded as a failure to meet the wage payment requirements of the New Jersey Wage and Hour Law.  Employers will also be subject to the penalties and remedies contained in the New Jersey Wage and Hour Law, including fines and possible imprisonment, reinstatement of a discharged employee to correct any discriminatory action and payment of all lost wages in full.

Bottom Line

The New Jersey Paid Sick Leave Act takes effect in 180 days, on October 29, 2018. Employers in New Jersey, in consultation with legal counsel, must review and revise existing policies, practices and procedures related to calculating employee’s sick leave to ensure compliance with the Act.  Human Resources and Benefits personnel should also be trained on the new paid sick leave law requirements and Managers should also receive updated training to ensure that internal recordkeeping processes are sufficient to keep track of time taken under the new law.

For more information about the potential impacts of the Paid Sick Leave Act or what steps your company can take to effectively ensure compliance with wage and hour laws, please contact John C. Petrella, Esq., Chair of the firm’s Employment Litigation Practice Group, at jpetrella@nullgenovaburns.com, or Dina M. Mastellone, Esq., Chair of the firm’s Human Resources Practice Group, at dmastellone@nullgenovaburns.com, or 973-533-0777.

Key 2017 Legal Changes that Employers and Federal Contractors Must Know About

Ready or not, 2017 is upon us and with it come many regulatory changes and important deadlines for employers and individuals. Make sure your New Year’s resolutions include compliance with the following changes and deadlines pertinent to employers and federal contractors.

Affordable Care Act

Employer Reporting. In November, the IRS extended the deadline for employers to meet their ACA reporting requirements. Employers required to furnish employees with Forms 1095 now have until March 2, 2017 to do so. The deadline to submit the Forms to the IRS remains February 28, 2017 for paper returns or March 31, 2017 for electronically-filed returns.

Marketplace Insurance. The deadline for individuals to obtain marketplace insurance coverage beginning January 1, 2017 expired on December 15, 2016. Individuals who want to enroll in marketplace insurance coverage for the balance of 2017 must do so by January 31, 2017. After the January 31 deadline, individuals may enroll in marketplace coverage only if they qualify for a Special Enrollment Period.

Required Contribution Percentages. For tax years and plan years beginning on and after January 1, 2017, the IRS increased to 9.69% of employee household income the maximum cost of coverage the employer can charge the employee for purposes of the employer mandate penalty. The IRS also increased to 8.16% of the employee’s household income the maximum cost of coverage the employer can charge the employee for purposes of determining whether the employee is eligible for an affordability exemption from the individual mandate.

IRS 2017 Contribution Limits for Retirement Plans and IRAs

The following are the IRS contribution limits for 2017:

  • 401(k) and 403(b) employee contribution limit: $18,000.
  • 401(k) and 403(b) catch-up contribution limit: $6,000.
  • IRA employee contribution limit: $5,500.
  • IRA employee catch-up contribution limit: $1,000.
  • 401(a)(17) compensation limit: $270,000.

Benefit Plan Changes

In May, the HHS Office of Civil Rights issued final rules implementing Section 1557 of ACA. Health programs must comply with these nondiscrimination rules effective January 1, 2017. Additionally, in May, the EEOC issued rules implementing Title I of the ADA and Title II of GINA as they relate to employer wellness programs. Employers must conform their wellness programs with these rules effective January 1, 2017. Plan sponsors that made material modifications to their benefit plans in the past plan year must provide participants with a Summary of Material Modifications within 210 days after the end of the plan year of the modification. For plan years ending on December 31, 2016, the SMM must be provided by July 30, 2017.

New York Minimum Wage and Overtime Salary Exemption Increase

Effective December 31, 2016, the N.Y. minimum wage and salary threshold exemption for time-and-a-half overtime pay increase based on the employer’s size and region as follows:

Minimum Wage Increase

  • New York City: Large Employer (11 or more employees): $11.00 per hour.
  • New York City: Small Employer (10 or fewer employees): $10.50 per hour.
  • Nassau, Suffolk and Westchester Counties: $10.00 per hour.
  • Remainder of New York: $9.70 per hour.

Overtime Salary Exemption Increase

  • New York City: Large Employer (11 or more employees): $825.00 per week.
  • New York City: Small Employer (10 or fewer employees): $787.50 per week.
  • Nassau, Suffolk and Westchester Counties: $750.00 per week.
  • Remainder of New York: $727.50 per week.

New Jersey Minimum Wage Increase

Effective January 1, 2017, the New Jersey minimum wage increases to $8.44 per hour.

EEO-1 Report

During 2017, no federal contractor or subcontractor is required to file an EEO-1 Report with the EEOC or DOL Office of Federal Contract Compliance Programs. The next filing date is March 31, 2018. For the March 31, 2018 filing and all future filings, EEOC and DOL will not accept paper filings. All filings must be done online. Finally, the snapshot pay period for the EEO-1 Report due on March 31, 2018 will be from October 1 to December 31, 2017 instead of July 1 to September 30.

Pay Transparency

Beginning January 1, 2017, pursuant to E.O. 13673 and the DOL Final Rule, a federal contractor or subcontractor must furnish a wage statement to each individual performing work under the federal contract if the individual is subject to the wage requirements of the FLSA, the Davis Bacon Act or the Service Contract Act. The wage statement must be provided each pay period and must include 1) the number of straight time hours worked; 2) the number of overtime hours worked; 3) the rate of pay; 4) gross pay; and 5) itemized additions to or deductions from gross pay. The federal contractor or subcontractor must inform an overtime-exempt individual in writing of the exempt status. For individuals treated as independent contractors, the federal contractor or subcontractor must provide a written notice that the individual is classified as an independent contractor.

Paid Sick Leave

Beginning January 1, 2017, pursuant to E.O. 13706 and the DOL Final Rule, a federal contractor or subcontractor must provide an employee with at least 56 hours per year of paid sick leave or permit an employee to accrue not less than one hour of paid sick leave for every 30 hours worked under a covered federal contract.

If you have any questions or would like to discuss how these changes and dates affect you or your business, please contact Patrick W. McGovern, Esq. at 973-535-7129 or pmcgovern@nullgenovaburns.com, or Nicole L. Leitner, Esq. at 973-387-7897 or nleitner@nullgenovaburns.com.

Plainfield Becomes New Jersey’s 12th Municipality to Require Paid Sick Leave

On March 14, 2016, the City of Plainfield became the 12th municipality in New Jersey to require private sector employers to provide paid sick leave to their employees. The paid sick leave, which ranges from 24 to 40 hours a year, can be used by employees for their own illness, to care for an ill family member, or to care for a child in the event of certain school closures.  The law will take effect on July 12, 2016.

Amount of Sick Leave

Plainfield’s Sick Leave Law sets forth different obligations for small and large employers.  Small employers, or those with less than 10 employees, must give a maximum of 24 hours of paid sick leave per year.  Large employers, or those with 10 or more employees, must provide a maximum of 40 hours of paid sick leave per year.  All employees accrue 1 hour of paid sick leave for every 30 hours worked each calendar year. Exceptions apply to child care, home health care, and food service workers, who are entitled to accrue a maximum of 40 hours of paid sick leave, despite the size of their employer.

Plainfield’s Paid Sick Leave Law entitles employees to carry over a maximum of 40 hours of paid sick leave from year to year.  Despite this carry-over provision, an employer can limit the use of paid sick leave to just 40 hours a year.  The Paid Sick Leave Law also contains two other significant provisions.  First, if an employer already offers a paid time off policy that is just as generous as the new law, an employer need not provide additional leave.  Second, the Paid Sick Leave Law does not require employers to pay employees for unused sick time upon termination of employment.

Eligibility For Paid Sick Leave

An employee must work 80 hours in a year to be eligible for paid sick leave.  As to employer size, which dictates the amount of sick leave an employee can accrue (either 24 or 40 hours), an employer must count all employees performing work for compensation on a full-time, part-time, or temporary basis. Employers with more than 10 employees, in total, will be considered a large employer. Those employers with a fluctuating number of employees should use the average number of employees employed during the preceding calendar year to determine size.

Use of Paid Sick Leave

Employees in Plainfield can use paid sick leave to care for themselves or a family member with a mental or physical illness, injury or health condition.  This care includes time off for medical diagnosis, treatment, or preventative medical care for a condition.  It may also be used for the closure of the employee’s place of work, or the employee’s child’s school or place of care, due to a public health emergency or to care for a family member who has been exposed to a communicable disease. An employee may use paid sick leave in increments as small as the employer’s payroll system uses to account for other absences.

If an employee seeks to use sick time, and the need for the use is foreseeable, an employer may require seven days advance notice from the employee.  If the need for paid sick leave is unforeseeable, an employer may require notice before the beginning of the employees’ shift, or in emergent circumstances, as soon as practicable.  After an absence, an employer may also require the employee to submit written confirmation that the time used was in fact used for the purposes authorized under the Paid Sick Leave Law.  Further, after three consecutive days or instances of sick leave, the employer may require documentation from a healthcare provider to confirm that the employee’s absence was necessary; the employer must not require details of the health condition or the nature of the illness.

Notice and Posting Requirements

Plainfield employers must provide written notice (available on the City’s website) to employees explaining their rights upon hire or, for current employees, as soon as practicable after July 12, 2016. Employers must also post the notice a conspicuous and accessible location at the work place.  The notices must be in English and in any language that is the first language of at least 10% of the employer’s workforce.

Fines and Penalties

Penalties include a fine not exceeding $750 for each day of the violation, and restitution in the amount of any paid sick time unlawfully withheld.  The Paid Sick Leave Law also prohibits employers from retaliating against any employee for taking leave or for interfering with the employee’s rights in connection with that law.

For more information regarding implementing Plainfield’s paid sick leave or how our business can develop a compliant paid sick leave policy, please Dina M. Mastellone, Esq., Director of the firm’s Human Resources Practice Group, at dmastellone@nullgenovaburns.com or 973-533-0777 or Nicole M. Amato, Esq., Associate, in the firm’s Human Resources Practices Group at nmamato@nullgenovaburns.com.

NYC To Provide Municipal Employees With Six Weeks of Paid Maternity, Paternity, Adoption And Foster-Care Leave As of January 1, 2016

On December 22, 2015, New York City Mayor Bill de Blasio announced that he will sign an Executive Order granting municipal managers and non-unionized workers up to 6 weeks of paid maternity, paternity, adoption and foster-care leaves.  Starting on January 1, 2016, New York City employees are eligible to take the 6 weeks of paid leave at 100 percent of salary and it can also be combined with accrued sick leave and/or accrued vacation – so that employees will be able to take up to 12 weeks maternity, paternity, adoption, or foster care leave without losing pay.

To cover the $15 million cost, all non-union employees will see their vacation time reduced by two days, from 27 to 25 and the City will be repurposing the existing managerial raise of 0.47 percent scheduled for July 2017. The City’s unionized workers are not covered, unless a deal is reached with their representatives through collective bargaining. The new policy puts New York City at the forefront of city and state policies around the country.  New York City joins Portland, San Francisco and Cincinnati which have also recently approved paid parental leave policies.  In the private sector, companies such as Facebook, Amazon, Apple, Twitter and Netflix have also joined the growing trend to provide workers with paid paternal leave.

For more information regarding how your business can implement paid sick leave, please Dina M. Mastellone, Esq., Director of the firm’s Human Resources Practice Group, at dmastellone@nullgenovaburns.com or 973-533-0777.