Update to Client Alert on New Jersey Paid Sick Leave Law

New Jersey’s Paid Sick Leave Law became effective on October 29th, and requires most New Jersey Employers, and Employers outside New Jersey who have employees who perform a substantial amount of their work in New Jersey or who are managed from New Jersey, to provide 40 hours of paid sick leave during each “Benefit Year.” In a prior Client Alert, we advised that the Law permitted Employers to determine what a “benefit year” would be and suggested that it need not be a calendar year, but could be a year based on an employee’s date of hire. This view was based on the Law’s definition of “Benefit Year” which is: “Benefit year” means the period of 12 consecutive months established by an employer in which an employee shall accrue and use earned sick leave as provided pursuant to section two (2) of this act…” (emphasis supplied)  

The phrase “an employee” in the definition seems to clearly permit a separate benefit year for each employee. The New Jersey Department of Labor has now issued Proposed Rules under the Law, and those Proposed Rules adopt a different definition of “Benefit Year.” Under the Proposed Rules, “Benefit year” means the period of 12 consecutive months established by an employer in which all employees shall accrue and use earned sick leave. (emphasis added)  The change in the Proposed Rule from “an” to “all” employees makes clear that the Department is of the view that Employers must have a single benefit year common for all employees.

We will have to await final Rulemaking to know if the different definitions will be retained or if the Proposed definition of “Benefit Year” will be confirmed to the statute’s definition. For most Employers having a single benefit year will make sense in any event, and for now, Employers subject to the Law are best advised to adopt a single benefit year for all employees until the issue is clarified.