On January 6, 2020, the New Jersey Department of Labor and Workforce Development (the “Department”) issued long-awaited regulations regarding enforcement of New Jersey’s Earned Sick Leave Law (ESLL) as well as its responses to comments about the initially proposed regulations.¹ The final regulations contain minimal non-substantive changes, and therefore do not require additional public notice or comment. The Department’s responses to the public’s comments and concerns about the proposed regulations provide helpful insight into how the Department interprets the ESLL and the intent behind various provisions.

One notable change from the proposed regulations is the deletion of language requiring employers to establish a single benefit year for all employees, which would have prohibited employers from defining the benefit year based on an employee’s anniversary date. The Department declined to adopt that provision² and indicated it will propose a new rule in the future to enable employers to establish multiple benefit years. The final regulations did not, however, affect the processes through which an employer may change a benefit year. Once the benefit year is established, employers can change it only by providing written notice to the Department at least 30 days prior to making the intended change. Such notice must include the proposed new benefit year, the reason for the change, and a list of employees with contact information and each employee’s two-year history of accrual, use, payment, payout and carry-over of earned sick leave. If the Department determines that an employer is changing the benefit year to prevent accrual or use of leave, it may impose a benefit year on the employer.

In response to comments and questions from the public, the Department clarified that if an employer chooses to maintain a single paid time off (PTO) bank to comply with the ESLL, the entire PTO bank must comply with the requirements of the ESLL. Thus, if an employer wants to satisfy its obligations under the ESLL with, for example, its single bank of 80 hours of PTO (which may be used for any purpose, including sick time, vacation, personal days, etc.), it must permit employees to use all 80 hours in accordance with the ESLL. This approach means employees would be permitted to use all 80 hours for sick time without providing advance notice to the employer and such absences could not be held against employees or counted under the employer’s attendance policy.

The remaining regulations are almost identical to the proposed regulations and mostly mirror the Frequently Asked Questions previously released by the Department. 

The Department intends to adopt additional regulations in the future, which will address outstanding issues, such as:

• The standard for determining whether the ESLL applies to certain individuals working both inside and outside of New Jersey. The Department plans to adopt the standard used by the Division on Civil Rights in applying the New Jersey Family Leave Act.  In that event, the ESLL will apply to individuals who routinely perform some work in New Jersey and have either their base of operations in New Jersey, or have their work directed and controlled from New Jersey. 
• The prorating of advanced earned sick leave for employees that either work part time or begin work in the middle of a benefit year. It is the Department’s position that, in either scenario, employers must still track hours worked and ensure the accrual does not fall below the statutory accrual rate.
• A revision to the administrative code (N.J.A.C. 12:69-3.1(a)), permitting employers to establish multiple benefit years.

The final regulations and guidance cover many other specific topics, including the rate of pay for earned sick leave, applicability of the ESLL upon expiration of a collective bargaining agreement, and the employer’s right to prohibit foreseeable sick leave on specific dates. Employers should review their sick leave policies to ensure compliance, continue to monitor the Department’s website for further guidance to enable continued compliance, and confer with counsel before making any changes to their sick leave policies in anticipation of any further regulations.