One provision of the paid sick leave law that takes effect Oct. 29 is that employers who have paid time off (PTO) policies do not necessarily have to establish a separate leave program for sick time to comply with the law. They can use their existing paid time off program under the law, IF it allows employees to accrue and use the leave according to the law.

That’s a big “if.”

At NJBIA’s paid sick leave seminar yesterday, attorney Jeffrey Corradino of Jackson Lewis P.C. offered some clarity on the policy, although he emphasized that there’s a great deal of confusion about the new law and the regulations that accompany it.

In short, he presented four questions to ask about your PTO program to determine if it would qualify under the paid sick leave law.

Question 1: Do your policies define “family member” broadly enough to encompass the definition in the law?

The law allows employees to take paid leave to care for a sick family member. As Corradino points out, however, the definition of “family member” is pretty broad. In addition to what most people would consider family members, paid sick leave law includes “any other individual…whose close association with the employee is the equivalent of a family relationship.”

Question 2: Do your employees accrue their time off at the appropriate rate, i.e. one hour of paid sick leave for every 30 hours worked?

For exempt employees, employers can either track their hours for leave accrual purposes or simply assume they work a 40-hour week.

Corradino said there is no guidance yet for calculating accrual for employees who regularly work in New Jersey and other states as well.

Question 3: Do your policies define and provide notice of the benefit year as defined in the statute?

Regulations issued since this article was published require the benefit year to be the same for all employees, effectively eliminating the ability to use an employee’s anniversary date. (Updated 10/30/18).

Question 4: Does you policy apply to all employees?

“With the exception of licensed professionals in health care, any paid sick leave policy must apply to all employees regardless of status or no matter how many hours worked per week,” Corradino said.

That means a PTO policy must be applicable to all employees or you must have a separate policy with the minimum accrual and carry over provisions for each classification that’s not covered by the policy.

33 responses to “Does Your Existing PTO Policy Comply with NJ’s New Paid Sick Leave Law?”

  1. Janet VanBenschoten says:

    We have one full time employee who receives 5 paid days off per calendar year. We have one part time employee who works anywhere from 15-25 hours per week and does not receive benefits. He has another full time job with state benefits. Are we required to give the the part time employee paid time off?

  2. We start our year on 1/1. We have the entire year scheduled 6 months before 1/1. The year for employees includes 6 sick/personal/any-reason paid days off for all F/T employees, and proportional days for P/T, but we have no P/T employees at this time. We also give 7 additional days off for religious holidays and two weeks off for vacation. Additionally, we pay for 6 U.S. holidays and 1-3 additional days for Thanksgiving, Christmas and New Year’s. We also pay for “snow/badweather” days, if the office is closed. What more do we need to do? We are a very small office, with only 3 paid employees. We pay 100% for their health insurance.

  3. Bonnie Yahner says:

    Our salaried/exempt staff receive salary continuation as their personal sick time. It is a lump sum at beginning of calendar year and is based on years of service, benefit is minimum 10 & max 90 days. This benefit is a richer amount of time, but it is strictly for empee own personal illness. With the new policy will they also have the benefit if applying this time for the other reasons stated?

    • Lisa says:

      Bonnie
      I replied to you through my email. Please call our legal hotline at 844-424-8197 for help on these issues – You are eligible to receive 30-free minutes of legal consultation per month just by being an NJBIA member.

  4. Chris Beaumont says:

    We have a 5 day sick leave per employee per calendar year, which accumulates at a different rate per month worked, prorated for new employees, and pay it out at year end if not used. If we change our accumulation rate to the new law rate, can we keep our policy the same as it is now? Are the accumulation hours based on Reg hours or total hours worked for the week?

    • Lisa says:

      Chris
      I replied to you through email. Please call our legal hotline at 844-424-8197 for help on these issues – You are eligible to receive 30-free minutes of legal consultation per month just by being an NJBIA member.

      • hi lisa… i don’t require legal advice for my question. i want to know if there is a spread sheet to issue to all of my employees, to keep track of their pto. this is very new to me as i only have 6 employees at this time, all temps (2 of them only work 20 hours a week). any suggestions would be appreciated. thank you. jamie

  5. Tammy says:

    Hi –

    I attended seminar on Friday, September 28th and still a little unsure. So will give you a little background on our current policy.

    We start our year on 1/1 so our policy is based on calendar year.
    The following is our vacation policy:
    Length of Continuous Service Amount of Vacation
    After 6 Months 1 week
    After 1 year 2 weeks
    After 11 years to 15 years 3 weeks
    After 15 years 4 weeks
    We hold five vacation days at the end of the year when the company closes between Christmas Eve and New Years Eve

    Additionally, we pay for the following holidays:
    New Years Day
    Martin Luther King Day
    Presidents Day
    Good Friday
    Memorial Day
    July 4th
    Labor Day
    Veterans Day
    Thanksgiving
    Day After Thanksgiving
    Christmas Day

    We also pay for “snow” days, if the office is closed. We also pay employees for emergency days based on our discretion. We pay 100% for their health insurance.

    We are a very small office, with only 10 full time (4 hourly, 6 salary) employees. Of the 10 employees there are at least three hourly employees that use all of their vacation time plus additional time by May/June.

    My questions are as follows:

    1. if we frontload 40 hours (not in increments) in January and the hourly employees use these PSL and their vacation time, we are not required to pay anything more.

    2. if we frontload 40 hours (not in increments) in January and the SALARIED employees do not use all of their PSL, they can be carried over to the following year OR paid out at year end?

    3. If carried over, how can we cap at 40 hours PSL (since we are not required to pay out more than 40 hours PSL)?

    4. when including the PSL in our handbook, do you recommend copying the reasons why employees will now have PSL days (ex: own health needs or that of family member defined by law or close association…, school closure, etc.)?

    5. are they any provisions to prevent employees from taking advantage of the law or misuses the law? For example, an employee that gets the “Monday morning flu” every month.

    Thanks!

    • Amy Rubinetti says:

      My name is Amy. We have a small family run business with 22 employees. My questions are exactly the same as Tammy’s above. The day they are hired our employees are given 1 week vacation and 3 personal days, all paid, to use as they wish no questions asked. They are also given 3 days paid funeral leave, paid snow days and several paid holidays. We have a few employees who have been with us over 10 years. These employees get 2 weeks paid vacation plus all the other paid days.

  6. Rose says:

    We have a sick leave policy in place for full time employees where we front load each with 48 hours sick leave paid. It cannot be carried over to the following year and is not paid at the end of the year.
    With the earned sick leave law in effect, can I have this earned sick leave policy for part time employees and our other policy for full time year round employees?

    Also can I have our current employees all sign the same sheet of paper listing their names that they received the policy or does a copy of the policy have to be signed by each individual employee separately?

    Does the full time employees have to receive a copy of this policy ?

  7. Christina says:

    We currently offer 1 week vacation, 3 sick days and 2 personal days in addition to all major holidays from the date of hire. Each year thereafter we add an additional 2 days per year to the vacation time until it reaches 2 full weeks per their employee handbook. With this new law will we only be required to allow the employee to accrue 2 additional ( 16 hours ) sick days or the entire 40 hours. And if it is not used all hours can be carried over or can we pay them out at year end. Also can they be required to us their sick time first before being paid for vacation or personal time which is not allowed to be carried over.

  8. GLORIA PITMAN says:

    I currently receive 120 hours of PTO with my company. This is to be used for personal, sick, vacation etc. I earned this after 5 years of dedicated employment, as per our handbook guidelines.
    As of this new Sick Leave law passing, my employer is saying they are changing the accrual rules and reducing their PTO rate rules and will be reflected as: 40 PTO hours for the first 5 years of employment, 80 PTO hours for 6-9 years, and 120 PTO for 10 years etc. This change is not only for new hires, but the change is going into effect for everyone immediately. Can they do this??
    I know PTO is not required by law, but if I already earned this entitlement, can they just take it away? They are tying to say that we now get 40 of sick leave ON TOP of PTO, so they are reducing the PTO rates to make it a better adjustment financially.
    I cant imagine this is okay.
    Even if you add the 40 Sick leave hours, with the companies new PTO rates, the total is only 80 hours for most employees… This is LESS than what us 5+ year employees were receiving. Any info would be helpful!

  9. Susan says:

    Under our PTO plan, hours are accrued on a monthly basis, but employees can use it before they accrue it, with the stipulation that if they terminate before making up that accrual time, any amount that was used but not earned will be deducted from their final paycheck. Our current accrual hours do meet and exceed the Earned Sick Leave law, but I can’t find anything in the law that says if we keep with our method of allowing employees to use it before they accrue it (basically advancing the days), that we would still be allowed to deduct the used but unearned time from the final paycheck. Can anyone offer guidance on this.

    • Toni Sabino says:

      Were you answering Gloria Pitmans question? If you were it really isn’t an answer, I believe she was asking can employers take away 5 days pto and put them as sick days? I am at my job over 30 years and have 3 weeks pto, now we are told they are taking away 1 week of pto and giving us 5 days of sick days, so now I have 2 weeks pto and 1 week sick days, is this legal?

  10. Gary Laura says:

    we are a regional trucking company currently paying our drivers holidays ( 9) yearly and after driver works 1 year they get 5 paid vacations days and 1 day per year thereafter. Does that exclude us from this new sick time pay for our truck drivers being that they are getting at least 14 days pay yearly?

  11. Diane says:

    If employer policy BEFORE the PSL law became effective was to offer employees vacation time ONLY based on service, do employees keep their vacation and earn PSL in addition? And can the employer change their vacation policy to PTO after the fact?

    • Sharon says:

      Hi were you able to get any information on your topic. My employer is trying to take away a week from us to replace with the sick days. I have been trying to look for information on it and haven’t founds anything on it.

      • Doris says:

        Additionally, employers who have existing PTO, personal days, vacation days, and sick day policies may utilize them to meet the requirements set by the state paid sick leave law.

  12. Patricia says:

    My company is very generous with our PTO policy and I would never ask for additional time off for sick time but my question is do they have to follow the new law when it comes to punishment and penalizing for the first 40 hrs of unscheduled PTO (call offs).

  13. Maria says:

    We currently give our full time employees after one year of service
    80 hours vacation
    24 hours sick
    2 float holidays typically used for Day after Thanksgiving and
    Good Friday
    I have two employees that are full time yet they are not here a year how can I manage everyones time and follow the NJ state law?

  14. Sharon says:

    With this new sick day law my employer wants to take away a week of our vacation time to use is for the sick days. I have 3 weeks vacation I would have 2 weeks vacation and 5 sick days. Can they do that? Where can I get more information about this?

  15. Jessica says:

    I’m wondering if the people above ever received a reply. Prior to the PSL policy taking effect, my employer offered 14 days of PTO. Since the policy, the only literature provided has been that we would be earning sick days at a rate of 1 hour per 30 hours worked for a maximum of 40 hours/year. However, when I inquired about whether the sick time was in addition to our PTO, I was told no. Does this mean that our PTO time was reduced without notice and is this legal? I have been searching exhaustively but have not found an answer to this question or a resource with more information for these types of cases. If someone could shed some light on this, it would be greatly appreciated.

    • Renee says:

      When you offer PTO to your employees, the PTO bank encompasses all types of time off such as sick, personal, vacation, holidays, etc. so you are not losing anything if you already accrue 80 hours which would be equivalent to 14 days PTO at 8 hours a day. As long as your PTO bank offers employees at least 40 hours a year of PTO, you are not required to add anything additional as the employees can use that time for sick. If you do not have a PTO policy and you offer days off that are specific to vacation, sick, personal, etc., then you are required to include at least 40 hours of sick pay if your policy does not offer the 40 hours. For example, if your sick pay policy only gives 24 hours of sick pay a year, then you must adjust your policy to add another 16 hours to make the policy 40 hours. Hope this helps explain the PSL.
      I had people asking me the same question and I had to tell them no, it’s not in addition to what you already accrue based on years of service since our policy offers at least 40 hours a year.
      There is another option for companies if they have specific paid time off for vacation, sick, personal, etc. What they can do is change the policy and create a PTO policy in order to cover all aspects of paid time off, but they would have to think about what they offer now and hopefully encompass that into the policy so that they don’t cause morale issues.

  16. Jean Carlson says:

    I work full time in a small medical practice. I have been here for 3 1/2 yrs. I get one week vacation. Period. If I don’t work, I don’t get paid. This includes holidays. I don’t get paid for any holidays. Not even Christmas, New Years Day, or Thanksgiving. Is my employer meeting the requirements of paid time off? I could use vacation days if I’m sick I suppose. Are sick days and PTO considered the same thing?

  17. S Ospina says:

    My employer provides 1-2 weeks of paid vacation. We were told that the days used for earned sick time would be taken out of our total vacation days. Is this accurate and allowed by law?

  18. Amanda Goodhart says:

    If an employee takes an unscheduled sick day, but works an extra shift later in the week, should I pay out the PSL and the hours worked?

  19. Cindy says:

    I am coming to this a bit late, but I have a question regarding the PTO policy. We are a small family owned company with 10 employees. We always allowed our employees to have 2 weeks (or more) PTO with no questions asked, plus we pay all major holidays. Under the new law, does this mean that if an employee takes his 2 weeks for vacation and then needs sick time, we don’t have to pay him anything? Also, if he uses 1 week for vacation and doesn’t use the other week for anything, does this then carry over for sick time to the following year? What if he doesn’t use any of his PTO?

  20. Gov Murphy’s law shows issues for both employers and employees. You got to wonder how much thought was given when they implemented this burden on small business. These unfriendly business practices is what drives away business (see NJ companies leaving the state… ) I personally recently moved to NC with my business still in NJ and to be honest, NJ doesn’t provide a good reason to keep a business open in nj. The only reason i keep it open is for my team which is still located in NJ. As an employer with under 10 employees I am forced to give 5 sick days to my loyal and valued employees (and they are essential so not being sarcastic). We never really had a sick policy but they do get 10 ptos (accrued by .0385 for every hour worked = 80 hrs per yr) for up to 9 yrs of employment and 15 for over 10 yrs (different formula). They now get the 10 pto plus 5 sick days plus 3 days bereavement (per occurrence) or is 3 days the max i should provide for bereavement? plus 9 days for holidays. This is a lot of overhead for a small business to handle along with criminal rates from obamacare benefits (if congress was forced to use obamacare for their staff then obamacare would be a much better healthcare plan – and tell your congressman that they shouldn’t have special privileges as this creates a separate class of workers), 401k, LT/ ST Disability, ADD, life ins, etc.

    Something has to give….

    I am looking into combining pto and sick for a total of 13 days with a 4 month waiting period for new employees. Is this allowed / legal in state of nj? Would my team like this…why would they, but there has to be a give and take. We are forced with new policies by the state when it was working fine prior. This BS policy effects both sides.

    I would follow calendar year. For any PT employee they would only be eligible for sick day accrual and we would follow the 1 hr for every 30 hrs worked rules.

    Also, is there an official policy for bereavement? Per instance or is 3 days total per year?
    Sorry for my ramble