Proposed Paid Sick Leave: The Wrong Cure for N.J. Employees and Employers

June 5, 2014Articles New Jersey Law Journal

Reprinted with permission from the June 5 issue of the New Jersey Law Journal. (c) 2014 ALM Media Properties, LLC. Further duplication without permission is prohibited. All rights reserved.

On Feb. 6, Assemblywoman Pamela Lampitt re-introduced Assembly Bill 2354, which would require every employer, regardless of size, to provide paid sick leave for its employees. A previous identical version of this bill introduced in the last legislative session died in committee.

Although seemingly well-intentioned, this law, if passed, would have devastating consequences for New Jersey employers, and, by extension, New Jersey employees.

The law, if passed, would require all employers with one or more employees to provide up to five days of paid sick leave per year to each of its employees. Large employers, which include any employer with 10 or more employees, would be required to provide up to nine paid sick days for each of its employees. Paid sick leave would have to be provided to all employees, including part-time, temporary and seasonal employees.

New Jersey business owners are already suffering from large economic burdens. Many employers still find themselves required to make cut-backs, having never fully recovered from the global economic crisis of 2008. New Jersey businesses already struggling received a crippling blow from Superstorm Sandy in 2012, the effects of which have not been fully abated. Rather, the March 2014 report on unemployment rates showed that statewide unemployment rates are at 8.4 percent. The national average, on the other hand, is down to 6.3 percent as of April 2014. Unemployment rates in two of the counties hardest hit by Superstorm Sandy—Atlantic and Cape May Counties—are at 12.4 and 15 percent, respectively.

These unemployment rates demonstrate that employers will be unable to commit already-strapped financial resources to initiatives such as paid sick leave. Employers already have new costs to contend with, associated with the recently passed ballot initiative increasing the minimum wage and mandating future increases tied to inflation.

Not only does the law impose financial burdens on employers, it is not necessary. Employers recognize that maintaining a qualified, trained workforce is of key importance; not only to ensure productivity but also to avoid the costs of recruiting and training replacement workers. Employers also recognize that employees get sick and may require time away from the workplace. As such, many employers already offer paid sick leave to employees. Other employers that cannot afford to offer paid leave frequently offer unpaid sick leave to employees, so that employees may take care of their health issues and retain their jobs. Forcing small employers that are already struggling financially to provide paid sick leave will lead to their cutting costs elsewhere. For many small employers, that will mean cutting staff, further exacerbating the unemployment problem in New Jersey and in direct contradiction to the asserted purposes of the bill.

In addition to the financial burdens of providing paid leave, the law, if passed, would create confusion with the Jersey City and Newark sick leave laws that have already been passed. The law, as drafted, does not preempt the field in this area. Therefore, the Newark and Jersey City laws will remain in effect. Accordingly, employers located in Jersey City and Newark may be faced with the situation where they have to provide in excess of the five or nine days of leave required by the state law. Further, other municipalities may follow suit with laws of their own that may conflict with the provisions of the state law and force employers to provide additional leave.

The Newark and Jersey City ordinances both provide that leave can be used in the following circumstances:

  • An employee's own health condition, including doctor's appointments to diagnose or care for an illness;
  • Care of a family member's health condition, including doctor's appointments to diagnose or care for an illness; and
  • Closure of the workplace by a public health official or due to a public health emergency or if the employee's child's school or place of care has been closed due to a public health emergency, or if the employee's family member has been placed under quarantine.

A "family member" is defined by both the Newark and Jersey City ordinances as:

  • Biological, adopted, foster, step-child or legal ward, child of a domestic or civil union partner, or a child to whom the employee stands in loco parentis;
  • Biological, foster, step-parent, adoptive parent, legal guardian of the employee or the employee's spouse, domestic partner, civil union partner or person who stood in loco parentis when the employee was a minor child;
  • Spouse or domestic or civil union partner;
  • Grandparent or spouse, civil union partner or domestic partner of grandparent; and
  • Grandchild.

The Jersey City ordinance and the proposed state law adds sibling to the list of sick family members for whom leave can be taken. However, the proposed state law also adds the sibling of a spouse to the list of family members and provides that sick leave may also be taken for victims of domestic violence. If an employee who works in Newark or Jersey City takes all of his or her eligible leave under the state law to care for a brother-in-law or as needed for a victim of domestic violence, none of this time taken would count as leave taken under the Jersey City or Newark ordinances. In that case, assuming the employee works for a "large" employer, the employer may have to provide up to 14 days of paid sick leave in a calendar year.

Providing up to 14 days of paid leave in a calendar year in and of itself may be a hardship to employers. However, the real cost to employers will be the inability to effectively deal with unproductive employees whose poor attendance drains the employer's resources by requiring the incurrence of overtime or the use of temporary employees at a premium rate. Employers have all dealt with the employee who is conveniently sick the day after every holiday or upon returning from vacation. Not only is this person the bane of the employer's existence, other employees resent what they believe is someone unfairly getting one over while they are required to work, creating morale problems in the workplace. Under the proposed law, even where leave taken is suspicious, the employer cannot discipline the employee for any leave taken under the law, meaning that an unreliable and unproductive employee is not disciplined until after missing several weeks of work. In the meantime, the remaining employees are stretched to cover for the unproductive employee.

The proposed law also does not address the use of earned sick time where the leave also qualifies for leave under the federal Family and Medical Leave (FMLA) or New Jersey Family Leave Act (NJFLA). Under both the FMLA and the NJFLA, an employer can require an employee to use any accrued paid time off. However, the proposed sick leave statute is silent as to whether an employer could force the use of time accrued under the law. If it is interpreted that an employer cannot force the use of sick time earned under the act, then it may discourage employers from offering other paid time off, such as vacation.

The proposed law also creates onerous accounting requirements for employers. Under the proposed law, employees who are hired after the effective date of the law would not begin to accrue time off until after their 90th day of employment. The Newark and Jersey City ordinances require leave to accrue immediately upon hire. Thus, it is again possible that an employer who has employees in Newark and Jersey City will have to provide even more leave than is mandated by the state law. These employers will have to keep separate accrual records to track the time that accrues under the applicable ordinance and the state law.

The problem noted directly above will arise and be of particular difficulty for employers that do not have a brick-and-mortar location in either Newark or Jersey City. This is because both city ordinances do not require an employee to be permanently located within the city. Rather, any employee who works in the municipality for at least 80 hours per calendar year is eligible to accrue time. Employees who travel to see customers or make deliveries within Jersey City or Newark may be eligible to accrue sick leave under those ordinances.

In short, the law creates more ills for employers and employees than it provides cures and should not be passed by the legislature.

Reprinted with permission from the June 5 issue of the New Jersey Law Journal. (c) 2014 ALM Media Properties, LLC. Further duplication without permission is prohibited. All rights reserved.