Paid Sick Leave Law in Morristown, New Jersey Became Effective on January 11, 2017

By: Vik C. Jaitly and Dan H. Aiken

This Ordinance, which was passed in September 2016, requires employers in Morristown, New Jersey to provide a certain amount of paid sick time per year depending on the size of the employer. Generally, employees who work more than 80 hours a year in Morristown will be covered under this Ordinance. The Morristown Ordinance is the 13th local paid sick leave ordinance enacted within New Jersey, following similar ordinances in the towns and cities of Bloomfield, East Orange, Elizabeth, Irvington, Jersey City, Montclair, Newark, New Brunswick, Passaic, Paterson, Plainfield, and Trenton.

The below chart provides the amount of paid sick time that employers are required to provide under this Ordinance:

Total No. of Employees Amount of Time Maximum
10 or more employees 1 hour of paid sick time for every 30 hours worked 40 hours a year
Fewer than 10 employees 1 hour of paid sick time for every 30 hours worked 24 hours a year
Exception: Regardless of the number of people employed by the employer, if the employee is a child care worker, home health care worker, or food service worker 1 hour of paid sick time for every 30 hours worked 40 hours a year

The Ordinance also specifies when, how, and for what purpose an employee may use any such paid sick time.  For example, an employee may use this time for his or her own mental or physical illness, injury, health condition, need for medical diagnosis care or treatment of a mental or physical illness, or an employee’s need for preventative care.  This time can also be used to provide care for a family member with a mental or physical illness.  Family members include an employee’s child (biological, foster, step, adopted, or legal guardianship), grandchild, spouse, domestic partner, civil union partner, parent, grandparent, and sibling.

Finally, the Ordinance also contains certain notice, recordkeeping, and anti-retaliation provisions.  All employers are required to give a written notice to each new employee regarding their rights under the Ordinance.  Such notice must describe the employees’ rights under the paid sick time ordinance, and the notice must be provided in English and in the primary language of at least 10% of the employer’s workforce.  The Ordinance also requires employers to display the notice in a conspicuous and accessible place at the workplace.  The Town of Morristown released a sample Notice that includes these above requirements, which can be found here.

To provide additional information on this Ordinance, and to assist employers and employees understand their rights and obligations, the Town of Morristown has also released an FAQ page, which can be found here.

It is crucial for employers to understand that this Ordinance applies to any employee who works 80 or more hours in the Town of Morristown, regardless of where your business is registered or located.  Therefore, employers will need to put in place a recordkeeping system that accurately tracks accruals and usage of paid sick leave time for employees that are covered under this Ordinance.  Additionally, employers should ensure compliance with the notice and posting requirements as outlined above.

 

New Jersey Legislature Postpones Vote to Override Pay Equity Veto

By Jessica Burt

On Monday, December 19, 2016, the New Jersey State Legislature postponed its vote to override the Governor’s veto of Senate Bill No. 992, also known as the New Jersey Pay Equity Act.  The Act was passed earlier this year by both the New Jersey Senate and Assembly, but vetoed by Governor Christie.

The Act provides that it will be an unlawful employment practice, or unlawful discrimination, for any employer to pay any of its employees at a rate of compensation, including benefits, which is less than the rate paid to employees of the other sex for substantially similar work.  An employer may pay a different rate of compensation only if the employer demonstrates that the differential is made pursuant to a seniority system, a merit system, or the employer demonstrates:

  1. That the differential is based on one or more legitimate, bona fide factors other than sex, such as training, education or experience, or the quantity or quality of production;
  2. That the factor or factors do not perpetuate a sex-based differential in compensation;
  3. That each of the factors is applied reasonably;
  4. That one or more of the factors account for the entire wage differential; and
  5. That the factors are job-related with respect to the position in question and based on a legitimate business necessity. A factor based on business necessity does not apply if it is demonstrated that there are alternative business practices that would serve the same business purpose without producing the wage differential.

See S. 992, 217th Leg. (NJ 2016).

Governor Christie vetoed the bill on May 2, 2016, stating that the remedial measures called for were too broad.  He recommended that the bill mirror the provisions of the Lilly Ledbetter Act to limit back pay to two years.  The bill also contained language that would allow for treble damages.  Christie recommended that the bill be amended to remove that provision “to remain consistent with well-settled State and federal law.”

In addition, Christie stated that the bill, in its current form, would eliminate any consideration of whether employees’ work was equal and whether they undergo similar working conditions.  He called this “nonsensical” and stated that it would make New Jersey “very business unfriendly.”  Christie also asked legislators to remove a provision that would have required employers that contract with the State to regularly report on their demographics and the pay of each employee involved in a contract.  Christie referred to that provision as “outrageous bureaucratic red tape creation.”  Links to the pay equity bill and the Governor’s statement regarding his action on the bill are available at: S-992; Governor’s Statement re S-992.

In New Jersey, a vetoed bill may still become law if the Legislature overrides the veto by a 2/3 vote.  The override vote was scheduled for Monday, December 19, 2016, but was ultimately postponed as state lawmakers discussed possible alternatives or compromise.  We will continue to provide updates regarding the status of New Jersey’s Pay Equity Act as they become available.

Courts in New Jersey Continue to Endorse “Awkward Theory” of Individual Liability in NJLAD Cases

By Lawrence J. Del Rossi

Referred to by some courts as an “awkward theory” of liability, employers and supervisors should be aware that courts in New Jersey continue to recognize the viability of individual liability claims under the “aiding and abetting” provision of the New Jersey Law Against Discrimination, N.J.S.A. §10:5-12(e).

Personal Liability for Supervisors: Title VII vs. NJLAD

Unlike Title VII of the federal Civil Rights Act, which does not provide for individual employee liability, New Jersey courts have held that in addition to “employers” being liable under NJLAD, supervisors can be personally liable for their illegal conduct under an “aiding and abetting” theory.  The New Jersey Supreme Court recently clarified the expansive definition of “supervisor” for purposes of the NJLAD as an employee who is (1) authorized to undertake tangible employment decisions affecting the plaintiff, or (2) authorized by the employer to direct the plaintiff’s day-to-day work activities.  Aguas v. New Jersey, 220 N.J. 494, 529 (2015).

To hold a supervisor liable as an “aider and abetter” under the NJLAD, a plaintiff must show that the individual (1) performed a wrongful act that caused an injury; (2) was generally aware of his or her role as part of an overall illegal activity at the time that he or she provided the assistance; and (3) knowingly and substantially assisted in the principal violation.  Tarr v. Ciasulli, 181 N.J. 70, 83084 (2004).  Aiding and abetting requires “active and purposeful conduct.”  Cicchetti v. Morris County Sheriff’s Office, 194 N.J. 563, 595 (2008).

What Makes this Aiding and Abetting Theory so “Awkward”?

Courts applying New Jersey law have yet to follow a uniform rule in situations where the plaintiff alleges that a supervisor aided and abetted the “employer” in violating the NJLAD based on the supervisor’s own conduct (i.e., as the sole actor engaged in the wrongful conduct).  In other words, what happens when the supervisor is the only person alleged to have engaged in the wrongful conduct?  Two distinct lines of cases have developed in this area of the law – one finding supervisory employees can be personally liable for aiding and abetting their own/the employer’s wrongful conduct (e.g., Hurley v. Atlantic City Police Dep’t, 174 F.3d 95 (3d Cir. 1999), and another refusing to impose individual liability (e.g., Newsome v. Admin. Office of the Courts of N.J., 103 F. Supp. 2d 807 (D.N.J. 2000).  See Aiding and Abetting Your Own Conduct, New Jersey Law Journal, Volume 209 (July 16, 2012), Employment Counselor, Number 241 (Sept. 2010).

A string of recent decisions by New Jersey state and federal courts suggest that this “awkward” theory is here to stay.  For example, in Yobe v. Renaissance Electric, Inc., 2016 WL 614425 (D.N.J. Feb. 16, 2016), the court denied a motion to dismiss the plaintiff’s NJLAD disability retaliation claims against his former supervisor, who was the only person alleged to have engaged in the retaliatory conduct.   The defendant argued that the plaintiff’s claim failed as a matter of law because a supervisor cannot “aid and abet” his own conduct.  Citing to the Third Circuit’s “prediction” in Hurley that the New Jersey Supreme Court would hold a supervisor personally liable under NJLAD, and an unpublished, non-precedential decision by the New Jersey Appellate Division in Rowan v. Hartford Plaza Ltd., 2013 WL 1350095 (App. Div. April. 5, 2013), the court in Yobe concluded that “[w]hile it is concededly an ‘awkward theory’ to hold an individual liable for aiding and abetting his own conduct, it would thwart the NJLAD’s broad and remedial purpose, and make little sense, to construe it as permitting ‘individual liability for a supervisor who encourages or facilitates another employee’s harassing conduct, while precluding individual liability for the supervisor based on his or her own discriminatory or harassing conduct.’”

Impact on Employers and Individual Supervisors

In discrimination, hostile work environment and retaliation cases brought under the NJLAD, it is common for a plaintiff to name his or her former supervisor as an individual defendant, particularly if the supervisor is the person who made the decision to take an adverse employment action against the plaintiff.   Naming the supervisor, particularly a high-level manager, might be viewed by the plaintiff as a tactical move to encourage an early settlement by driving a wedge between the employer’s interest in defending its business decision and the supervisor’s reputational or financial impact concerns.  Absent a showing of fraudulent joinder, a plaintiff’s naming of his or her supervisor as a defendant might prevent the employer from removing the action to federal court based on complete diversity of citizenship.  In addition, legal fees could increase if separate legal representation for the employer and the supervisor is required.  These important issues should be considered and discussed with counsel at the outset of the case.  Because the NJLAD does not provide for individual liability for aiding and abetting if the employer is not found liable, the best defense is a unified one between the employer and the individual supervisor.

“BAN-THE-BOX” Signed Into Law in New Jersey

By: Helen E. Tuttle and DeMaris E. Trapp

On August 11, 2014, New Jersey Governor Chris Cristie signed into law “The Opportunity to Compete Act”, commonly referred to as New Jersey’s “ban-the-box” law, which prohibits employers from asking about the applicant’s criminal history prior to the completion of the first interview. New Jersey is the 6th state, in a growing trend, to pass some form of the “ban-the box” law which is intended to remove obstacles to employment for people with criminal records. New Jersey will join Hawaii, Illinois, Massachusetts, Minnesota, and Rhode Island, all of which have similar laws covering private employers.

New Jersey’s law will become effective on March 1, 2015 and covers both public and private employers operating in New Jersey who employ 15 or more employees. After the first interview, New Jersey employers are free to inquire into the applicant’s criminal background and may ultimately refuse to hire the applicant based on his or her background, so long as the refusal is not based on expunged of pardoned records.  In addition to the restrictions on inquiries pre-first interview, the law prohibits employers from publishing job postings or ads stating that it automatically excludes applicants with arrest or conviction records.

The Usual Exemptions

Not unlike other laws, New Jersey’s law provides for several exceptions. The law does not apply to those positions that require criminal background checks by law or regulation, including positions in law enforcement, corrections, the judiciary, homeland security, and emergency management. Also excluded are positions where certain convictions would, by law, either automatically disqualify the applicant or restrict the employer from engaging in certain business activities based on its employees’ criminal records.

Penalties and Preemption of Local Ordinances

A positive for employers is that the law will not spur more employment litigation, because it does not create a private right of action for alleged violations. However, employers who violate the law will be met with increasing fines –$1,000 for the first violation, $5,000 for second violations, and $10,000 for each subsequent violation.

Finally, the law will preempt existing or future local laws – including Newark’s local “ban-the-box” law – that regulate private employers’ use of criminal background checks.

Next Steps for New Jersey Employers

Employers operating in New Jersey should begin working with their Labor & Employment counsel now to review their employment applications, job postings, policies, and employee handbooks to ensure compliance prior to March 1, 2015. Employers should also ensure that training is provided to those individuals involved in hiring and interviewing of potential job applicants. Additionally, employers who operate in jurisdictions within and outside of New Jersey should continue to closely monitor the “ban-the-box” legislations in other jurisdictions as these laws remain a growing trend.

Finally, employers should keep in mind that under guidance issued by the EEOC and a number of state laws, an employer may be required to demonstrate the relevance of a given conviction as a basis for excluding an applicant from employment.

New Jersey’s Whistleblower Law Is Not An End Run Around Labor Law Preemption

By: Meredith R. Murphy

New Jersey’s Appellate Division has rejected two Atlantic City nightclub workers’ attempts to artfully plead their way around preemption under the National Labor Relations Act (NLRA) and the Labor Management Relations Act (LMRA) by alleging a whistleblower claim under New Jersey’s Conscientious Employee Protection Act (CEPA). The case was brought by two “Tipped Floor Euros,” i.e., alcoholic beverage servers, who alleged retaliation and constructive discharge following their complaints regarding tip-pooling, wage payments and being forced to perform duties prohibited by the collective bargaining agreement (CBA). The case is O’Donnell v. Nightlife, et al. (April 17, 2014).

In rejecting the plaintiffs’ CEPA claims, the Appellate Division took a narrow view of the whistleblower statute, citing the standard that the conduct complained of must “pose a threat of public harm, not merely private harm or harm only to the aggrieved employee.” [Opinion, p. 11, available here, citing Mehlman v. Mobil Oil Corp., 153 N.J. 163, 188 (1988)] The Appellate Court agreed with the trial court that most of the plaintiffs’ complaints alleged violations of the CBA, not violations of law, and accordingly, not violations of CEPA.

The Appellate Division also took a broad view of preemption under the NLRA and LMRA. The Court gave credit to plaintiffs’ attempts to “artfully phrase” the language in the complaint – alleging that failure to pay the share of the nightly tip pool constituted “fraud” and failure to pay full minimum wage for non-tipped work constituted a “violation of [New Jersey] wage and hour laws.” However, the Appellate Division ultimately ruled that such state causes of action are presumptively preempted under NLRA and LMRA and were appropriately dismissed as preempted because they each ultimately asserted violations of the CBA or claims that required interpretation of the CBA.

Accordingly, based on this precedent, a unionized employee’s remedy lies not under CEPA but through the union grievance procedure and the relief available under Sections 7 and 8 of the NLRA.

Newark, New Jersey Passes Paid Sick Leave Ordinance

By: Jessica A. Burt

States and municipalities across the country are considering, and adopting, legislation requiring employers to provide paid sick leave.  This legislation, generally aimed at assisting workers with low wages who may lack access to paid sick time, has been passed or is currently pending in at least 18 states, including: Alaska, Arizona, California, Florida, Hawaii, Illinois, Iowa, Maryland, Michigan, Minnesota, Nebraska, New Jersey, New York, North Carolina, Oregon, Pennsylvania, South Carolina and Washington.

Newark, New Jersey recently followed the trend, and passed its own Paid Sick Leave OrdinanceBeginning May 29, 2014, all private employers must provide paid sick time to employees who work in the City of Newark for at least 80 hours in a calendar year.  The law is the second in the state of New Jersey, coming just months after Jersey City passed a similar ordinance.  The key components of Newark’s Ordinance follow.

Covered Employers

Employers with 10 or more employees working in Newark must provide up to 40 hours of paid sick time to each employee in a calendar year.  Employers with fewer than 10 employees working in Newark must provide up to 24 hours of paid sick time to each Newark employee.  This is a key distinction between Newark’s Ordinance and Jersey City’s Ordinance which requires employers with fewer than 10 employees in Jersey City to provide 5 unpaid sick days.

How Much Paid Sick Time is Provided?

Under the Ordinance, employees begin to accrue paid sick time on the first day of employment.  Employees accrue one hour of paid sick time for every 30 hours worked, until they reach the relevant amount (24 or 40 hours).  Employees may not use paid sick time until they have worked for their employer for at least 90 days.  Employees are entitled to carry over accrued, but unused sick time to the next calendar year, but no more than 40 hours.  If an employee is terminated, employers are not required to pay employees for any accrued, but unused sick leave under the Ordinance.

Employers with paid leave policies already in place that meet the total annual accrual requirements are not required to provide employees with additional paid sick time.  Nothing in the Ordinance prohibits employers from offering a more generous paid sick time policy.

Use of Paid Sick Time Extends to Care of Family Members

Employees are permitted to use paid sick time for the medical diagnosis, care, or treatment of their own or their family member’s mental or physical illness, injury or health condition.  Under the Ordinance, a “family member” includes (1) a biological, adopted or foster child, stepchild or legal ward, a child of a domestic partner, a child of a civil union partner, or a child to whom the employee stands in loco parentis; (2) a biological, foster, stepparent or adoptive parent or legal guardian of an employee or an employee’s spouse, domestic partner or civil union partner or a person who stood in loco parentis when the employee was a minor child; (3) a person to whom the employee is legally married under the laws of New Jersey or any other state or with whom the employee has entered into a civil union; (4) a grandparent or spouse, civil union partner or domestic partner of a grandparent; (5) a grandchild; (6) a domestic partner; (7) or a sibling.

Employees may also use paid sick time when their place of business, or their child’s school, is closed due to a public health emergency.  Employers determine whether employees may use paid sick time in increments of less than one day.

Employers may request that employees confirm in writing following their use of paid sick time that the time was used for an authorized purpose.  Employers may also require that employees provide documentation concerning their use of paid sick time if an employee uses it for three consecutive days or instances (if employees are permitted to use it for periods of less than 1 day).  Where the need is foreseeable, employers may require employees to provide advance notice of their intention to use paid sick time, but cannot, under any circumstance, require employees to give more than 7 days’ notice.

Notice and Recordkeeping

Employers must give written notice to new hires regarding employee rights under the Ordinance.  The notice must describe the right to paid sick time; the accrual rate; the amount of sick time provided; the right to be free from retaliation for properly requesting use of paid sick time; and the right to file a complaint or bring an action in municipal court if paid sick time is denied by the employer or the employee is retaliated against for requesting or taking paid sick time.  The notice must be in English and the primary language spoken by the employee, so long as the primary language of the employee is also the primary language of at least 10% of the employer’s workforce.

Employers must also provide written notice to existing employees as soon as practicable and display a poster in a conspicuous and accessible place containing the information required in the notice.  The poster must be in English and in any language that is the first language of at least 10% of the employer’s workforce.  The Department of Child and Family Well-Being (the “Agency”) may create and make available to employers notices and posters, but it has not issued them yet.  If no poster has been issued by May 29, 2014, employers should post their own notice in the workplace.  Employers should also update paid time off and sick leave policies to ensure that they satisfy the requirements of Newark’s Ordinance.

The Ordinance also requires employers to keep accurate records of the hours worked and paid sick time taken by employees.  The employer must allow the Agency access to the required records.

Finally, no matter where they operate, employers must keep an eye on local pending legislation regarding paid sick leave.