A Guide to Paid Time Off: Federal, New York, and New Jersey Laws

In the ever-evolving landscape of labor laws and regulations, it’s crucial for your business to stay compliant with the laws around paid time off (PTO).

As an employer, you understand the significance of creating a work-life balance for your employees. Providing adequate PTO not only increases employee satisfaction and well-being, but also contributes to a healthier more productive work environment.

Please use this blog as a guide to understand the Federal, New York, and New Jersey laws that govern PTO policies to support your valued workforce.

Federal Paid Time Off Laws

Although the United States Federal Government has The Fair Labor Standards Act (FLSA) to protect employees, there is no federal law that mandates paid time off for all employees.

This means, federally you are not required to provide paid vacation, sick leave, or personal days to your employees.

One thing to note, there is a Family and Medical Leave Act (FMLA) that grants eligible employees the right to take unpaid, job-protected leave for specific family and medical reasons. This could be up to 12 weeks of unpaid leave in a 12 month period.

Some of these reasons include: the birth or adoption of a child, caring for a seriously ill family member, or struggling with a personal serious health condition. 

So that leaves us with state laws, let’s break them apart to understand them fully.

New York State Paid Time Off Laws

Unlike the Federal government, New York State does have laws around paid sick leave.

In April 2020, the state of New York passed new legislation that guarantees paid sick leave for employees under the New York Paid Sick Leave law. Here is the breakdown:

• 100+ Employees - you must provide up to 56 hours of paid sick leave per calendar year
• 5-99 Employees - you must provide up to 40 hours of paid sick leave per calendar year
• 0-4 Employees - If your net income exceeds $1 million, you must provide up to 40 hours of paid sick leave. If your net income is less than $1 million, you must provide up to 40 hours of unpaid sick leave.

You have the choice to provide the full amount of sick leave at the beginning of each calendar year or have an accrual system in place.

If you choose to have employees accrue their leave, this must be accrued at a rate of one hour for every 30 hours worked. 

Who’s eligible?

All private sector employees are covered, regardless of industry, occupation, part-time status, and overtime exempt status. This also includes employees of charter schools, private schools, and non-profit organizations. Please note, federal, state and local government employees are not covered.

What’s the pay rate?

You must pay your employee’s normal pay rate for any paid leave, with no allowances or credits.

What about vacation?

New York State does not require you to cover compensation for unworked time for vacation. Vacation time is entirely up to your discretion to provide as the employer. 

As a guideline, the average vacation time is 10-14 days per year after one year of service. 

New Jersey State Paid Time Off Laws

New Jersey also has their own law for paid sick leave called the Earned Sick Leave law. 

Employers must provide up to 40 hours of earned sick leave per year for their employees to care for themselves or a loved one.

As an employer, you can provide these 40 hours upfront or have your employees accrue these hours.

If you choose the accrual route, your employee will accrue 1 hour of earned sick leave for every 30 hours worked.

Your employee can request to work additional hours to make up for hours of work missed, rather than use earned sick leave. However, as an employer you cannot require this.

Who’s eligible?

This law applies to employers of all sizes and includes full-time, part-time, and temporary employees.

What’s the pay rate?

You must pay your employee their regular rate, but no less than the state minimum wage. If their pay varies or typically includes gratuities, food, and/or lodging, please look at the 7 most recent workdays & divide that by the total hours of work during that 7-day period. 

Paid sick leave must be paid the same or next pay period and should be applied to your employee’s regular paycheck.

What about vacation?

There are no New Jersey laws that require an employer to provide paid or unpaid vacation time. 

As an employer, you can create your own policy at your discretion and choosing.

How can MegaPay help?

With MegaPay's timekeeping software, you can easily track time off and accrual. Your team will have the flexibility to request time off on the go from their cell phone, which will go straight to their manager to approve or reject.

If you’d like to learn more about MegaPay and how you can start automating your time sheets,

Contact us today.