New Jersey Enacts Mandatory Paid Sick Leave Law for All Employers

New Jersey has officially become the tenth state to enact a statewide mandatory paid sick leave law, fundamentally altering the employment landscape for businesses operating across the region.

Governor Phil Murphy signed the New Jersey Paid Sick Leave Act into law, setting an effective date of October 29, 2018. The legislation requires employers of all sizes across the state to provide up to 40 hours of paid sick leave per year to covered employees.

Who Falls Under the New Law

The statute applies broadly to nearly any business entity employing workers in New Jersey for compensation, including temporary help service firms. However, it carves out specific exemptions. Construction industry employees working under a collective bargaining agreement, per diem healthcare employees, and public employees who already receive sick leave benefits are excluded from the mandate.

For temporary staffing agencies, paid sick leave accrues based on the total time worked on assignment with the firm rather than separately for each individual client company. Current employees began accruing time on the effective date, while newly hired workers start accumulating sick time on their first day of employment.

Employees can begin using their accrued sick time after the 120th day of their first date of employment. Eligible uses extend far beyond a personal cold. Workers can utilize the leave for their own medical care, to care for a sick family member, or to address circumstances related to domestic or sexual violence. The law also covers absences due to public health emergencies that force the closure of a workplace, school, or childcare facility, as well as meetings requested by school staff regarding a child’s health condition or disability.

Accrual Mechanics and Carryover Rules

Employers must designate any period of 12 consecutive months as their benefit year, which cannot be changed without prior notice to the New Jersey Department of Labor and Workforce Development. Workers accrue up to 40 hours of sick time at a rate of one hour for every 30 hours worked, though companies have the option to frontload the entire 40 hours at the start of the benefit year.

Businesses with existing paid time off, vacation, or personal day policies can satisfy the mandate using those systems, provided employees enjoy the same flexibility required by the Act. Employers are not required to permit workers to carry over more than 40 hours of unused sick time into a new benefit year, nor are they required to pay out accrued, unused sick leave upon a worker’s separation from employment unless mandated by an existing company policy or collective bargaining agreement.

Preemption of Local Ordinances and Strict Enforcement

The statewide legislation explicitly preempts all existing and future municipal paid sick time ordinances. This immediately supersedes local laws in 13 New Jersey municipalities: Bloomfield, East Orange, Elizabeth, Newark, Jersey City, Paterson, Passaic, Trenton, Montclair, Irvington, New Brunswick, Plainfield, and Morristown. Local ordinances across those cities became moot upon the effective date of the Act.

Enforcement mechanisms under the law carry sharp teeth. Employees retain the right to sue employers for violations, seeking actual damages alongside an equal amount in liquidated damages. Furthermore, the statute establishes a strict anti-retaliation provision. Any adverse action taken against an employee within 90 days of engaging in protected activity—such as filing a complaint or informing coworkers of their rights—carries a rebuttable presumption of being unlawful.