Lite DePalma Greenberg Law Blog

Understanding New Jersey's Earned Sick Leave Law (Updated 2025)

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.

1. What is the New Jersey 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.

2. Who Is Covered by the Law?

Nearly every employee working in New Jersey is covered, with limited exceptions for:

• Construction workers under a collective bargaining agreement
• Per diem healthcare employees
• Certain public employees who already receive sick leave under another law
• Independent contractors

3. How Do Employees Accrue Sick Time?

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.

4. What If My Company Already Offers PTO?

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:

• Provide at least 40 hours per benefit year
• Permit use for all reasons covered by the law
• Follow the law’s recordkeeping, notice, and anti-retaliation provisions
• Allow carry over or payout for unused time

If your PTO policy limits how or when time can be used or provides less than 40 hours, it may not meet compliance requirements.

5. When Can Employees Start Using Their Earned Sick Time?

Employees can begin using accrued sick leave after 120 calendar days of employment, unless the employer allows earlier use.

6. What Are Permissible Uses of Earned Sick Leave?

Employees can use earned sick leave for:

• Their own illness, injury, or preventive care
• Care of a family member’s illness or appointment
• Public health emergencies (including workplace or school closures)
• Time related to domestic or sexual violence (e.g., seeking legal, medical, or relocation assistance)

7. Can Employers Require Documentation for Sick Leave?

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.

8. Can Unused Sick Time Carry Over to the Next Year?

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.

9. Can Employers Offer to Buy Out Unused Time?

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).

10. What Happens If an Employee Quits or Is Terminated?

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.

11. What Notice and Recordkeeping Are Required?

Employers must:

• Distribute a written Notice of Employee Rights (available from the NJDOL)
• Post the notice conspicuously in the workplace
• Keep records for at least five years showing hours worked and leave accrued/used

12. What Are the Penalties for Non-Compliance?

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.

• First Violation: A disorderly persons offense punishable by a fine of $100–$1,000, up to 90 days in jail, or both.
• Second or Subsequent Violations: A fine of $500–$1,000, up to 100 days in jail, or both.
• Each Week/Employee without proper sick leave counts as a separate offense.
• Administrative Penalties: Up to $250 for a first offense and $250–$500 for later ones.
• Administrative Fees on Back Pay:
  • 10% for a first violation
  • 18% for a second
  • 25% for third or subsequent violations
• Interest: The Commissioner may add interest when an employer unreasonably delays payment or retains owed wages for an extended period.

13. What Should Small Businesses Do Now?

Small businesses should:

• Review or adopt a written Earned Sick Leave or PTO policy that meets legal standards
• Ensure payroll systems accurately track accrual and usage
• Provide required notices and retain detailed records
• Train managers to avoid discouraging or penalizing lawful leave use

Need Guidance or a Policy Review?

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.