Lite DePalma Greenberg & Afanador Law Blog
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October 20, 2025Download PDF
Despite being in effect for several years, many New Jersey small and midsize businesses still do not fully understand, or comply with, the state’s Earned Sick Leave Law. This law applies broadly, yet confusion remains about how it interacts with existing PTO policies, what documentation can be requested, and whether unused time must be paid upon termination. Below are answers to the most common questions employers and employees ask about New Jersey’s Earned Sick Leave Law.
The Earned Sick Leave Law requires nearly all employers in New Jersey (regardless of size) to provide employees with up to 40 hours of paid sick leave per benefit year. This includes full-time, part-time, seasonal, and temporary workers.
Nearly every employee working in New Jersey is covered, with limited exceptions for:
Employees accrue 1 hour of earned sick leave for every 30 hours worked, up to 40 hours per benefit year. Thus, an employee who works at least 1,200 hours a year will have worked enough hours to accrue the 40-hour maximum under the law after about 30 weeks (roughly 7½ months). Part-time or seasonal employees will accrue more slowly, but still at 1 hour per 30 hours worked.
If that sounds complicated, it is because maintaining the recordkeeping that is required to perform these ongoing calculations can be onerous to small businesses. The law accounts for that reality and expressly allows employers to frontload the full 40 hours at the beginning of the benefit year instead of tracking accruals throughout the year.
If you choose to frontload, and an employee is hired mid-year or will work part-time, frontloaded hours can be prorated. However, and this is crucial, if the employee ends up working more hours than expected, you must “true up” (add more hours) so they receive at least 1 hour per 30 hours worked, up to 40 hours total.
If your business has a PTO policy that allows employees to use paid time off for any reason, including illness, vacation, or personal matters, and offers at least the same rights and protections as the Earned Sick Leave Law, you are considered compliant.
However, your PTO policy must:
If your PTO policy limits how or when time can be used or provides less than 40 hours, it may not meet compliance requirements.
Employees can begin using accrued sick leave after 120 calendar days of employment, unless the employer allows earlier use.
Employees can use earned sick leave for:
Yes, but only if an employee is absent for three or more consecutive days. Employers may request reasonable documentation, such as a doctor’s note or proof of a public health closure, but they cannot require details about the specific illness.
Yes. Employees can carry over up to 40 hours of unused sick leave into the next benefit year. However, if an employer frontloads the full amount of earned sick leave for the benefit year on the first day of each benefit year, the employer is not required to carry over unused sick leave from the prior year if the employer frontloads again. So, frontloading resets the clock each year so long as you give employees a fresh 40 hours at the start of the next benefit year.
Yes. Employers may offer to buy out unused sick leave at the end of the benefit year instead of allowing carryover. If employers use the accrual method, employees have the right to choose whether to cash out or carry over the time. If the employer frontloads paid leave, the employer can choose to pay out the unused time or carry it over (so long as the employer is using the front-loading method the following benefit year).
Under New Jersey’s Earned Sick Leave Law, employers are not required to pay out unused earned sick leave when an employee leaves, whether voluntarily or involuntarily—unless the company’s policy or employment contract provides otherwise.
However, if an employer rehires that employee within six months, any unused earned sick leave must be returned to the employee upon rehiring.
Employers should clearly specify in their written policies whether unused PTO or sick leave will be paid out to prevent misunderstandings.
Employers must:
Yes. Employers that violate New Jersey’s Earned Sick Leave Law face the same penalties and remedies as those under the state’s Wage and Hour Law. Violations can result in fines, imprisonment, and civil liability for unpaid wages, damages, and interest.
Small businesses should:
Even well-intentioned PTO policies can fall short of legal requirements. If your business is unsure whether its leave policy complies with New Jersey’s Earned Sick Leave Law, contact Lite DePalma Greenberg & Afanador, LLC. Our employment attorneys counsel businesses throughout Newark, Morristown, and across the state.
