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A Further Explanation of the New Jersey Paid Sick Leave Act

On May 2, Governor Murphy signed the New Jersey Paid Sick Leave Act into law, requiring New Jersey employers to provide up to forty (40) hours of paid sick leave per year to covered employees. The law applies to all employers in the
State of New Jersey, including temporary help service firms, but excludes public employers required to provide their employees with sick leave. The new law will go into effect on October 29, 2018 and preempts all existing and future municipal ordinances in New Jersey regarding paid sick time.

Who is a Covered Employee?

The Act covers most employees working in the State of New Jersey. Employees in the construction industry, employed under a collective bargaining agreement, per diem health care employees, and public employees who already have sick leave benefits are specifically excluded from the Act.

Accrual of Leave

Employers must designate any period of 12 consecutive months as a benefit year, and cannot change the benefit year without first notifying the New Jersey Department of Labor and Workforce Development. In each benefit year, an employee may accrue up to 40 hours of paid sick leave benefits at a rate of one hour for every 30 hours worked. Employers are permitted to “frontload” the full 40 hours at the beginning of the benefit year. Employees may carry over accrued but unused benefits, but employers are not required to provide more than 40 hours of paid sick leave in a single benefit year. Employers may choose to offer employees the ability to payout unused but accrued sick leave in the final month of the employee’s benefit year. If an employee chooses to receive such a payment, the employee can choose the full amount of unused sick time or 50% of such sick time and carry-over the rest, as long as it’s not more than 40 hours.

Paid time off (PTO) policies may be used to satisfy the Act’s requirements so long as the policy provides at least the same benefits as those provided under the Act. Current employees will begin accruing sick time on October 29, 2018. Employees hired after October 29 will begin to accrue sick time on the first date of their employment. With respect to temporary help service firms, paid sick leave will accrue on the basis of the total time worked on assignment with the firm, not separately for each client firm where the employee is assigned.

Cosmo Insurance Agency is an independent insurance agency serving surrounding communities in New Jersey. Cosmo keeps its promise to assure an efficient and creative approach to the services we offer. Each of our clients experience a personalized and long-term relationship with us. Our New Jersey based team of health brokers guides our clients in helping them choose the most cost-effective options. By incorporating the latest in technology-based tools and laws on healthcare, employee benefits, life insurance and finance, we keep our clients up-to-date with the plans that encompass all of their needs, whether it is individual or group insurance.