New Jersey’s two largest cities will impose new burdens on employers with proposed Ordinance.

On January 28, the Municipal Council of Newark, New Jersey, passed an ordinance requiring employers to provide paid sick leave to their employees (the Ordinance). The Ordinance will now go to Mayor Luis A. Quintana to sign, and it is anticipated that he will do so in the coming weeks. The law will become effective 120 days after it is signed, at which point Newark will join Jersey City in requiring employers to provide paid sick leave. The Jersey City law became effective January 24. Notably, a similar bill that would require paid sick leave statewide is pending in the New Jersey Assembly.

What will the Ordinance provide to employees?

Under the Ordinance, full- and part-time employees of private-sector employers will begin to accrue leave immediately upon being hired, although they will not be eligible to use the leave until after their 90th day of employment. Sick leave will accrue at a rate of one hour for every 30 hours worked. Employees who work for employers with 10 or more employees and those who work for employers in the child care, home healthcare, and food service industries will be able to accrue a maximum of 40 hours of sick leave per calendar year. Employees who work for employers with less than 10 employees and who do not work in the aforementioned industries will be able to accrue a maximum of 24 hours of sick leave per calendar year. Employees will be able to carry over this leave from year to year, but they will not be able to accrue more than 40 hours at any given time and will not be allowed to use more than 40 hours per calendar year. The law will not require employers to “cash out” accrued but unused sick leave upon termination of employment, unless an employer has a policy or contractual obligation to do so. If an employer chooses on its own to pay employees for any accrued but unused sick leave at the end of a year, the employees may not be able to carry over the sick leave.

Employers that already provide their employees with sick leave beyond the sick leave that will be mandated by the Ordinance will not be required to provide additional sick leave. However, as discussed more fully below, employers must be cautious to ensure that the sick leave they provide covers the same absences under the same terms as will be required by the Ordinance. Employers also should take notice of the Ordinance’s broad retaliation provision, which includes taking “adverse action” against an employee for, among other things, “filing a complaint or informing any person about any employer’s alleged violation of this Act.”

An employee will be able to file a complaint alleging a violation of the Ordinance in Newark Municipal Court. An employee also will be able, but will not be required, to file a claim with the city’s Department of Child and Family Well-Being (the CFWB). If the CFWB will not be able to resolve the issue with the employer, the CFWB (or employee) will be able to file a complaint in Newark Municipal Court. The court will be able to fine an employer $1,000 per violation and also order restitution in the amount of any paid sick leave unlawfully withheld.

Who will be covered by the Ordinance?

The Ordinance will cover private-sector employees who work at least 80 hours per year within the city of Newark. Employees covered by a collective bargaining agreement (CBA) will only be covered by the Ordinance after the term of any existing CBA expires. In addition, an employer and a union may agree in a CBA to waive all or select provisions of the Ordinance.

If an employee is transferred to a separate division, entity, or location, but remains employed by the same employer, the employee will be entitled to all paid sick time accrued at the prior division, entity, or location and will be entitled to use all paid sick time. If the employer terminates or lays off an employee and the employee is rehired within six months, the previously unused accrued paid sick time will be reinstated and the employee’s prior employment will be counted toward meeting the 90-days-of-service requirement to use the leave.

For what purposes will employees be allowed to take leave?

An eligible employee will be able to use sick leave to address his or her own or a family member’s mental or physical illness, injury, or health condition; to care for a child whose school or daycare has been closed due to a public health emergency; or to care for a family member when it has been determined that the family member would jeopardize the health of others in a community because of the family member’s exposure to a communicable disease, regardless of whether the family member has actually contracted the disease.

Under the Ordinance, “family members” include the following:

• Biological children, as well as adopted children, foster children, stepchildren, legal wards, and children to whom the employee stands in loco parentis (such as a domestic partner’s children)

• Biological parents, as well as foster parents, adoptive parents, stepparents, and legal guardians of an employee or of an employee’s spouse, domestic partner, or civil union partner and persons who stood in loco parentis when the employee was a minor child

• Spouses, civil union partners, and domestic partners

• Grandparents, as well as the spouse, civil union partner, or domestic partner of a grandparent

• Grandchildren

• Siblings

What notice and documentation will be required by the Ordinance?

Covered employers will be required to distribute to all employees and to post in the workplace a notice of rights “as soon as practicable” after the Ordinance takes effect. Employers will be required to provide new employees with the notice at the time of hire. The notice and poster that will be required must be in English and any other language that is the first language of at least 10% of the employer’s workforce. The CFWB will be able to create the notice and poster and make them available to employers.

An employee will be obligated to provide his or her employer with notice of the need for leave “as soon as practicable” and will be allowed to make requests for leave orally at any time prior to the start of the employee’s work shift. An employer will be allowed to require documentation to substantiate the need for leave only after an employee has used more than three consecutive days of sick leave (or three consecutive instances of sick leave in cases where the employer has allowed paid sick leave to be used in increments of less than one day).An employer will not be allowed to require an employee to provide a description or explanation of the illness or condition necessitating the leave. Furthermore, an employer will not be allowed to require, as a condition of an employee’s taking paid sick time, that the employee search for or find a replacement worker to cover the hours during which the employee is absent.

What are the key differences between the Ordinance and existing state and federal law?

Employers should be aware of several key differences between the Ordinance and the federal Family and Medical Leave Act (FMLA) and the New Jersey Family Leave Act (NJFLA).

• The Ordinance will allow an employer to ask for documentation to substantiate the need for leave only after an employee uses more than three consecutive days or three consecutive instances of sick leave, but even then the employer will not be able to require any information regarding the nature of the medical condition. This will complicate an employer’s ability to assess whether a given illness may also be protected by the FMLA and/or NJFLA.

• The Ordinance will require employers to maintain records showing the hours worked and sick leave accrued and used by employees and to permit the CFWB to inspect such records upon request. An employer’s failure to maintain or retain adequate records documenting the hours worked by an employee and paid sick time taken by an employee will create a rebuttable presumption that the employer has violated the Ordinance, absent clear and convincing evidence otherwise. This requirement will complicate compliance for employers that may give employees generic personal time off and therefore do not generally track paid sick time separately from other personal time away from work.

• The Ordinance will allow an employee to use sick leave for purposes generally not covered by either the NJFLA or the FMLA, such as leave for a child whose school has been closed due to a public health emergency.

Recommendations

To ensure compliance with the Ordinance, employers that operate in Newark should consider taking the following actions:

• Determine which employees, if any, will be covered by the Ordinance and issue the required notice once the Ordinance goes into effect.

• Review sick leave policies to ensure that they will comply with the requirements of the Ordinance. Employers must ensure that they are not only providing sufficient sick leave to employees but also that employees are permitted to take that leave under the terms that will be required by the Ordinance.

• Train managers and human resources employees on the Ordinance and make sure that they are aware of the Ordinance’s antiretaliation provisions.

• Ensure that time and payroll records are sufficiently detailed to reflect the amount of sick leave accrued and used by covered employees.