The New Jersey Law Against Discrimination ("LAD") was amended effective January 13, 2008, to expressly provide that employers must reasonably accommodate applicants' and employees' sincerely held religious beliefs - such as allowing time off to observe the Sabbath or other holy days - unless to do so would impose an undue burden. Although the LAD has long prohibited discrimination on the basis of religion, the new amendments establish an affirmative duty of reasonable accommodation not previously recognized under state law. Indeed, the newly-enacted reasonable accommodation obligations appear to greatly exceed employers' existing obligations under federal law.

The new LAD amendment provides that an employer may not "impose upon a person as a condition of obtaining or retaining employment, including opportunities for promotion, advancement or transfers, any terms or conditions that would require a person to violate or forego a sincerely held religious practice or religious observance" unless "after engaging in a bona fide effort the employer demonstrates that it is unable to reasonably accommodate the religious observance or practice without undue hardship on the conduct of the employer's business."

Thus, for example, an employer may be required to honor employee requests not to work on Saturdays or Sundays or requests to adjust their work schedules to permit attendance at worship services, unless such schedule accommodations would impose an undue hardship. The new law further provides that if an employer grants time off from work for religious reasons as a reasonable accommodation, the employer may require that the employee make up the work "at some other mutually convenient time," or may charge the time off against any accrued leave with pay (other than sick leave), or may charge the time off as leave without pay.

Undue Hardship Considerations

The amendment does not define what constitutes a "bona fide effort" to reach a reasonable accommodation, but does define an "undue hardship" as an "accommodation requiring (1) unreasonable expense or difficulty, (2) unreasonable interference with the safe or efficient operation of the workplace, (3) a violation of a bona fide seniority system or (4) a violation of any provision of a bona fide collective bargaining agreement."

The new law identifies various factors employers should consider in determining whether an accommodation constitutes an undue hardship, including "the identifiable cost of the accommodation, including the cost of loss of productivity and of retaining or hiring employees or transferring employees from one facility to another, in relation to the size and operating cost of the employer" as well as "the number of individuals who will need the particular accommodation."

The law also contains two "safe harbor" provisions, by specifically providing that (1) "an accommodation shall be considered to constitute an undue hardship if it will result in the inability of an employee to perform the essential functions of the position in which he or she is employed," and (2) no accommodation is required "where the uniform application of terms and conditions of attendance to employees is essential to prevent undue hardship to the employer." The law does not further explain this latter exception and thus the circumstances of its application are uncertain.

The new law appears to impose a much greater reasonable accommodation obligation upon New Jersey employers than exists under federal law. Under federal law, the Supreme Court has held that if an accommodation imposes more than a "de minimis" burden on an employer, the accommodation need not be granted. The LAD amendments appear to require more than simply a de minimis burden to justify denial of an accommodation. Many observers believe that the Supreme Court's narrow reading of Title VII's religious accommodation requirement reflects hesitancy by the Court to run afoul of the Constitution's First Amendment ban on establishment of religion. The fate of any First Amendment challenge to the LAD's new requirements remains to be seen.

Impact on Pay and Benefits

The new law also addresses various pay and benefits ramifications of granting a religious accommodation.

If an employer grants a schedule change as an accommodation, the employee is not entitled to any "premium wages" (such as premium pay for night, weekend or holiday work) or "premium benefits" (including seniority, sick leave or annual leave) that would ordinarily be applicable to the hours worked by the employee as an accommodation. For example, if an employer permits an employee to work the night shift rather than the day shift in order to attend religious services on Sundays, the employee is not entitled to any night shift differential that might otherwise be applicable.

However, this provision does not relieve the employer of any obligation to pay overtime wages, nor does it supersede any entitlement to premium wages or benefits due under a collective bargaining agreement. Moreover, the employer must count any hours worked by an employee as an accommodation "towards the accruing of seniority, pension and other benefits."