On Thursday, December 17, the New Jersey Senate voted 22-17 to pass S785, which would require businesses in the state to offer their employees paid sick leave. NJCJI opposed this legislation because the highly prescriptive structure of the bill, compounded by the incentivized litigation enforcement mechanism, will deprive employers of the necessary flexibility to manage their business and respond to suspected abuse if it is enacted.
Although proponents of the bill focus on allowing employees to stay home when they are sick, the legislation would do much more than that. Indeed, employers who already offer more generous paid sick leave to their employees than would be mandated under the bill are nevertheless opposing this legislation.
The reason is largely because the broad statutory entitlement to paid sick leave, compounded by the incentivized-litigation enforcement mechanism, would deprive employers of the flexibility to administer their leave policies in a way that deters abuse and is consistent with the needs of their businesses.
Under this legislation, an employer who does almost anything related to paid sick leave, including simply informing any person about the availability of paid sick leave, gets a 90 day window during which any adverse employment action they take is presumed to be retaliatory. If an employee files a lawsuit alleging the employer violated the law during that 90 day window, the burden is on the employer to prove in court that the action was unrelated to the employees’ sick leave-related activity. It is not even clear that reassignments to meet business demands would be lawful under this legislation, since “retaliatory action” is defined to include even an unfavorable work assignments. Under these conditions, employers would have difficulty effectively managing their employees without generating a lawsuit.
The expansive scope of potential liability is compounded by the severe penalties that attach to violations of this legislation. Plaintiffs are entitled to actual damages plus an equal amount of punitive damages, plus attorney fees and court costs. The high cost of litigation, and the financial risk of losing the case, mean many claims would settle immediately, regardless of their merit. These costs are all passed on to consumers.
The bill passed by a vote of 22-17, with Sen. Van Drew (D – Cape May Court House) as the only legislator not voting along party lines.
This bill will now go to the Assembly, which it has been reported, disagrees with the Senate’s inclusion of a preemption clause. NJCJI will continue to monitor this legislation.