Corporate Payroll Services

New Jersey has become the 10th state to adopt mandatory paid sick leave.  The law goes into effect on October 29, 2018 and provides up to 40 hours of paid sick leave per year to covered employees.

The state sick leave law overrides all current municipal ordinances.  Employers who already have a leave policy in place (including those based on a municipal ordinance) are free to continue to use that policy so long as it is at least as generous as what is required by the state.  You should, however, be sure to comply with the state’s notice requirements.


All New Jersey employers, regardless of size, must provide employees with paid sick leave.  The only employees exempt from the law are

  • Construction workers subject to a collective bargaining agreement,
  • Per diem healthcare workers, and
  • Those employed by a public agency who receive sick leave through another program.

Accrual, Payout and Carryover

All employees, whether temporary, part-time, full-time, salaried, hourly, or paid on commission, must accrue one hour of sick leave for every 30 hours worked.  Employers may cap an employee’s sick leave accrual and use at 40 hours per benefit year.

The employer and employee may mutually agree to a payout in the final month of the benefit year of 50% or 100% of the employee’s unused sick time.  If unused time is paid out in full, carryover is not required.  If 50% is paid out, the remaining 50% will carry over.  And if the employee does not want to be paid out, or the employer chooses not to offer this option, all unused time up to 40 hours will carry over.

Employers may grant sick leave up front in a lump sum.  When using the lump sum method, employers may either pay employees for unused sick leave at the end of the calendar year or allow carryover.  With lump sum plans, whether to pay out or allow carryover is the employer’s choice – the agreement of the employee is not required.  In no case will time be forfeited, unless it is in excess of the carryover limit of 40 hours.

Usage for Employees and Family Members

Employees are eligible to use leave on their 120th day of employment.  Sick time may be used for the following:

  • Diagnosis, care, treatment of, or recovery from an employee or family member’s mental or physical illness, injury, or health condition, or for preventive health care;
  • In the case of certain public health emergencies;
  • When time off is needed because the employee or a member of their family is a victim of domestic or sexual violence;
  • To attend a school-related conference or meeting.

“Family members” is broadly defined to include a child, grandchild, sibling, spouse, domestic partner, civil union partner, parent or grandparent.  It also includes anyone “whose close association with the employee is the equivalent of a family relationship.”

Employers may set increments of use (e.g., one hour or four hours).  However, they may not require an employee to use more time than they were scheduled to work during the shift they are missing.  Plus, employees may not be required to find their own replacement for a missed shift.

Employers may require reasonable documentation, such as a doctor’s note, if the employee uses sick leave for sickness or injury for three or more consecutive days.

If the need for leave is foreseeable, employers may require up to seven days’ notice.  An employer may also prohibit the use of foreseeable earned sick leave on certain dates.

Sick Leave Payment Rate

When sick leave is used, it must be paid at the employee’s regular rate of pay.  This must not be less than the applicable minimum wage.  Unused sick leave does not need to be paid out at the end of employment.  Employees rehired within six months must be credited with their previously accrued and unused paid sick leave.  They also must be allowed to use it immediately.

Notice to Employees

Employers must post a notice that will be produced by the Commissioner of Labor and Workforce Development.  The notice must be provided to each employee individually, within 30 days after the notice is made public.  Employees hired after this time should be given the notice upon hire.

Employers must keep records of hours worked and earned sick leave time used by employees for five years.

Action Items

Employers should create and implement a compliant sick leave policy by October 29, 2018.  You should also watch for the Commissioner’s notice and distribute it to employees as required.  The Department of Labor and Workforce Development will likely release rules or FAQs prior to October.  These should assist employers in better understanding the law.  In the meantime additional information can be found with the HR Pros at HR Support Center, who contributed to this post.

HR Support Center