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.

 

DOL Issues Final Rule Establishing Paid Sick Leave for Federal Contractors

By Alexa E. Miller

On September 29, 2016, the Department of Labor (“DOL”) issued a Final Rule implementing Executive Order 13706, which requires federal contractors and subcontractors performing work on or in connection with certain contracts to provide employees with up to 56 hours (7 days) of paid sick leave per year beginning on January 1, 2017. However, because this rule became final relatively recently, the Final Rule implementing EO 13706 could be rescinded by exercise of the Congressional Review Act (5 U.S.C. §§ 801-808), which is not subject to filibuster.

Applicability of the Final Rule

The Final Rule applies to certain new contracts and replacement contracts for expiring contracts with the federal government requiring performance in whole or in part within the United States that result from solicitations issued on or after January 1, 2017 (or that are awarded outside the solicitation process on or after January 1, 2017).

The Final Rule does not apply to all federal contractors; it only applies to the following types of contracts with federal government:

  1. Procurement contracts for services or construction covered by the Davis-Bacon Act (“DBA”): The DBA applies to contracts to which the federal government is a party, for the construction, alteration, or repair (including painting and decorating of public buildings and public works) of the federal government and that require or involve the employment of mechanics or laborers;
  2. Service contracts covered by the McNamara-O’Hara Service Contract Act (“SCA”): The SCA applies to any contract entered into by the United States that has as its principal purpose the furnishing of services in the United States through the use of service employees;
  3. Concession contracts: a contract under which the federal government grants a right to use federal property including land or facilities, for furnishing services; and
  4. Contracts in connection with federal property or lands and related to offering services for federal employees, their dependents, or the general public.

The Final Rule implementing paid sick leave for federal contractors does not apply to: construction contracts excluded from the DBA (and those valued at less than $2,000); service contracts exempted from SCA coverage by statute or regulation (and those valued at less than $2,500); grants; contracts or agreements with and grants to Indian Tribes; work performed outside of the United States; and contracts for manufacturing or furnishing of materials, supplies, articles or equipment to the federal government including those subject to the Walsh Healy Public Contracts Act.

Reasons For Sick Leave

The permissible reasons for using paid sick leave under the Final Rule are much broader than under the Family Medical Leave Act (“FMLA”) or many state mandated paid sick leave laws. Under the Final Rule, covered employees may use paid sick leave for themselves or their family members, including:

  1. For a physical or mental illness, injury, or medical condition;
  2. When obtaining diagnosis, care, or preventative care from a health care provider;
  3. When caring for a child, parent, spouse, domestic partner, or any other individual related by blood or affinity whose association with the employee is the “equivalent of a family relationship,” who has need for diagnosis, care, or preventative care, or is otherwise in need of care; or
  4. For domestic violence, sexual assault, or stalking situations.

Notably, the Final Rule allows employees to use paid sick leave to care for a person who is the “equivalent of a family relationship,” meaning no biological or legal relationship to the employee is necessary.

Accrual of Paid Sick Leave

Employees working on or in connection with a covered contract accrue one (1) hour of paid sick leave for every 30 hours worked, up to a maximum of 56 hours per year. Contractors must allow employees to carryover up to 56 hours of accrued but unused sick time from one accrual year to the next. Contractors may cap the amount of paid sick leave employees can accrue to 56 hours each year and can prohibit an employee from having more than 56 hours of paid sick leave available for use at any point in time under the accrual method. Therefore, accrual may be limited to less than 56 hours depending on how much unused sick leave was carried over from the previous accrual year and how much sick leave is used by the employee in the current year.

Alternatively, the Final Rule allows employers to frontload paid sick leave (grant the full allotment of leave) at the beginning of the benefit year. Significantly, any unused paid sick leave (including frontloaded leave) must be carried over from year to year, but the maximum amount that a worker can carryover is 56 hours. Because frontloading leave at the beginning of each benefit year does not eliminate a contractor’s obligation to allow employees to carryover unused sick time, an employee may have more than 56 hours of paid sick leave available for use at one time under the frontloading approach. However, an employee will not receive more than 56 additional hours in any one year (56 hours frontloaded plus 56 unused hours carried over from the prior benefit year, which equals a total of 112 hours).

Integration with Existing PTO Policies and Collective Bargaining Agreements

A contractor’s existing Paid Time Off (“PTO”) policy can fulfill the paid sick leave obligations under EO 13706 as long as it provides employees with at least the same rights and benefits as the Final Rule. The DOL’s guidance explains that if a contractor provides employees with at least 56 hours (7 days) of paid time off that can be used for any purpose and meets the requirements of the Final Rule, then the contractor does not have to provide separate paid sick leave, even if an employee uses all of the time for vacation.

There is also a temporary delay in application of the Final Rule for employees whose covered work is governed by a collective bargaining agreement (“CBA”) that was ratified before September 30, 2016, and that provides at least 56 hours of paid sick leave (or paid time off that may be used for sickness/health care reasons) per year.  In such circumstances, the requirements of the Final Rule will not apply until the date the agreement terminates or January 1, 2020, whichever occurs earlier. If the CBA provides less than 56 hours of paid time off that may be used for sickness/health care reasons, then the contractor must provide employees with the difference between 56 hours and the amount of sick time/PTO provided under the existing CBA that is consistent with either the Final Rule or the terms and conditions of the governing CBA.

Penalties for Non-Compliance

All covered contracts and subcontracts entered into on or after January 1, 2017, must contain a mandatory contract clause, which directs, as a condition of payment, that contractors shall provide paid sick leave to all employees performing work on or in connection with a covered contract. The DOL’s Wage and Hour Division is charged with investigating potential violations of and obtaining compliance with the Final Rule. Failure to comply with the paid sick leave obligations can lead to significant penalties including, but not limited to, the contracting agency withholding payments due on the contract as necessary to pay workers lost pay and/or benefits for any violation of the requirements of the Final Rule.

Takeaways to Consider

Here are some key points for federal government contractors and subcontractors to consider:

  1. The Final Rule takes effect on January 1, 2017, regardless of the change in administration, but the incoming Congress may set it aside after it takes effect;
  2. Determine the expiration date of existing contracts with the federal government and identify covered contracts that may be renewed or awarded on or after January 1, 2017;
  3. Keep in mind administrative considerations, such as segregating covered work from non-covered work, tracking hours worked on or in connection with a covered contract, using an accrual method or frontload method (carryover requirements apply under both methods), tracking usage of leave, maintaining records of written denials, providing notice of available sick leave, etc.;
  4. Review and update existing PTO policies to ensure compliance with the Final Rule;
  5. Coordinate with Human Resources and/or union representatives if unionized employees have collective bargaining agreements before implementing any benefit or policy changes;
  6. When considering leave requests, keep in mind the expansive permissible uses of paid sick leave including care for an employee’s own illness, care for a family member or “the equivalent of a family relationship,” and domestic violence, stalking or sexual assault;
  7. Review attendance policies to ensure that employees are not disciplined for using paid sick leave;
  8. Post notice of Workers Rights Under Executive Order 13706 provided by the Department of Labor in a prominent and accessible place in the workplace;
  9. Maintain records of requests for leave, approvals and written denials, and sick leave usage, and provide notice of available paid sick leave on pay stubs or itemized wage statements; and
  10. Ensure that the mandatory contract clause in Appendix A to the Final Rule, which is a condition of payment, is contained in all new covered contracts and subcontracts with the federal government.

The Emergence of Paid Sick Leave Laws

By Thomas J. Barton and Matthew A. Fontana

In last week’s blog entry, Lynne Anne Anderson highlighted the increasing number of states that mandate employers to provide school related unpaid leave for parents.  This week’s entry looks at another growing trend in the employee leave space, paid sick leave.  An increasing number of states and localities now provide paid sick leave. It is important that both employers and employees are aware of this trend and whether these laws apply to their locality or state.

The following states (and District of Columbia) have paid sick leave laws:

State: Coverage/Eligibility: Amount of Paid Sick Time: Can Sick Time Be Used to Care for Loved Ones:
Connecticut Hourly workers in certain “service” occupations who work for businesses with 50 or more employees. [1] Up to 40 hours per year Yes: children and spouses.
California Workers employed in California for 30 or more days a years, including state and local public workers. [2] Workers can earn up to 48 hours or 6 days but an employer isn’t required to allow use of more than 24 hours or 3 days a year. Yes: children, parents, grandchildren, grandparents, spouses, registered domestic partners and siblings. 
Massachusetts Workers employed in Massachusetts who do not work for cities and towns. Workers in businesses with 11 or more employees up to 40 hours of paid sick time a year.  Yes: children, spouses, parents, or parents of a spouse.
Oregon Workers employed in Oregon, including public workers but excluding independent contractors. Workers in businesses with at least 10 or more employees: up to 40 hours of paid sick time a year. Yes: children, spouses, same-sex domestic partners, parents, parents of a same-sex domestic partner, grandparents, and grandchildren.
Washington, D.C. Individuals employed by an employer within Washington D.C. [3] 24 or fewer employees: up to 24 hours a year.25-99 employees: up to 40 hours a year.

100 or more employees: up to 56 hours a year.

Yes: children, grandchildren, spouses of children, siblings, spouses of siblings, parents, and registered domestic partners.
Vermont Workers employed by an employer in Vermont for an average of no less than 18 hours per week during a year.  [4]  From 1/1/17-12/31/18: up to 24 hours a year. After 12/31/18: up to 40 hours a year.   Yes: children, parents, parents-in-law, grandparents, spouses, grandchildren and siblings.

As demonstrated by the above chart, paid sick leave laws vary from state to state and it is important to know the detail of the laws that apply to your business. For example, the coverage/eligibility requirements, use of sick time to care for loved ones, and the amount of paid sick leave available are different for each of the states with paid sick leave laws.  Other differences include the rate that paid sick leave is earned, whether paid sick leave can be carried over to subsequent years, and whether paid sick leave applies to care for a new born child.  As an example, in Connecticut, sick time is earned at a rate of one hour for every forty hours worked, whereas in California, sick time is earned at a rate of one hour for every thirty hours worked.  Additionally, Oregon’s law is the only one that allows the use of paid sick leave to bond with a newborn child.  [5]  The bottom line for business is if you operate in a state with a paid sick leave law, it is important to carefully review the law and make sure your policies conform to its requirements.

Beyond states, several cities and counties have paid sick leave laws, including the following: Montgomery County (MD), San Francisco, Seattle, New York City, New Jersey Eleven (Newark, Passaic, East Orange, Paterson, Irvington, Trenton, Montclair, Bloomfield, Jersey City, Elizabeth, and Plainfield), Oakland (CA), Tacoma, Philadelphia, Emeryville (CA), Pittsburgh, Spokane, Santa Monica (CA), Minneapolis (effective date July 1, 2017), and Chicago (effective date July 1, 2017).  As with the state paid sick leave laws, the eligibility requirements, amount of sick leave available, and how that sick leave can be used differ from locality to locality and require individualized analysis.

Even if your business does not operate in a locality that currently has a paid sick leave law, it is increasingly likely that your state or locality may soon consider such a law.  The combination of the growth of paid sick leave laws and their prominence in policy discussions surrounding support for families continues to build momentum for their adoption in more communities.  Currently, New Jersey, Maryland, and Washington have paid sick leave legislation that is under consideration and there is growing support for these laws in numerous other states.

Employers should stay tuned and follow these developments to ensure that their sick leave policies and procedures stay compliant in the ever changing world of leave laws.


[1] For a full list of which professions are covered “service” occupations go to www.ctdol.state.ct.us./wgwkstnd/SickLeaveLaw.htm

[2] Workers subject to the Railway Labor Act (i.e. employees of airlines and railroads) are exempted. Workers who provide in-home supportive care are exempted until July 1, 2018.

[3] The following individuals are exempted: independent contractors, students, health care workers choosing to participate in a premium pay program, unpaid volunteers. 

[4] The following individuals are exempted: workers under 18 years of age; workers employed for 20 or fewer weeks in a year in a job scheduled to last 20 or fewer weeks; certain State workers excluded from the State classified service; certain employees who work on a per diem or intermittent basis at a health care or long-term care facility; certain per diem or intermittent workers who only work when indicating availability, have no obligation to accept the work, and have no expectation of continued employment; certain substitute educators for a school district or supervisory district/union if under no obligation to work a regular schedule or period of long-term (30 or more consecutive school days) substitute coverage; and certain sole proprietors/partner owners of an unincorporated business.

[5] California has a paid family leave law that provides paid leave for the care of a newborn child. 

 

New York City Expected to Pass Expansive Paid Sick Leave Law

By: Lynne Anne Anderson

The New York City Council has reached a compromise that will enable it to pass a paid sick leave law.  Although Mayor Michael Bloomberg objects to the legislation, news outlets are virtually unanimous in predicting that the City Council has enough votes to override his veto.  While federal law does not require employers to provide paid sick leave, Connecticut and some cities (including San Francisco, Seattle and Portland) have adopted paid sick leave laws.  Other cities (including Philadelphia) are considering doing so.  In New York City, even employers that already provide paid sick leave will have to take a close look at the new legislation and reconcile their current sick leave policies with the city’s mandates.  For example, New York City’s proposed law includes anti-retaliation provisions that would prohibit employers from firing employees for using their paid sick leave.

What employers are covered by the proposed law and when would it go into effect?

Under the proposed New York City law, as of April 1, 2014, companies with 20 or more employees would have to provide at least five paid sick days a year.  The law would be extended to apply to companies with 15 or more employees as of October 1, 2015.   Earlier versions of the legislation had required nine paid sick days, so five days was part of the compromise lawmakers reached in response to small business owners’ very vocal objections.  The New York City law is not as expansive as some other city laws.  For example, paid leave obligations in San Francisco, Seattle and Portland apply to companies with as few as five employees.

Notably, the New York City law will also require companies of any size to provide five days of sick leave as of April 1, 2014, but the time off may be unpaid.

What employees would be eligible?

To be eligible for paid leave, employees working within the borders of New York City would have to be employed for at least 4 months.  The law applies to full-time and part-time workers, although seasonal workers and student interns would not be eligible.

Other details include that the New York City Department of Consumer Affairs would have enforcement authority and there is a safety net provision that would delay implementation of the law if New York City’s economy slows down.

Advocates of the legislation claim that the law will provide paid sick leave for one million workers.  It is clear that this law will have a significant impact on small businesses.  The Society for Human Resource Management reports that only 32% of small businesses (50 or less employees) currently offer paid sick leave, and an advocacy group, A Better Balance, reports that over 80% of restaurant workers and 60% of retail workers in New York City do not receive pay when they miss work due to sickness.  As noted above, this law will also impact larger employers to the extent that they do not already provide five days of paid sick leave or only offer benefits to full-time employees or employees employed for longer than four months.  And, as with any new law, it is important to track implementation to comply with notice requirements, both in terms of posting and adoption of compliant company policies prior to the April 2014 and October 2015 effective dates.

Editor’s Note:

On May 8, 2013, the New York City Council passed the Earned Sick Time Act by a 45-3 vote.  New York City Mayor Michael Bloomberg had vetoed the bill on June 7, 2013, but the New York City Council overrode the veto on June 27.   New York City now joins San Francisco, Washington, D.C., Seattle, Portland, and the State of Connecticut to pass mandatory sick leave laws.