United States: New Jersey Adds Sharp Teeth, And Employer Notice Duty, To Wage And Hour Law

On August 6, 2019, New Jersey enacted its Wage Theft Law, transforming the state's wage and hour laws into one of the most robust in the country. As discussed below, the law substantially expands the civil and criminal recourse available for nonpayment of wages and for retaliation. Among other things, the statute broadens potential individual, and joint and successor liability to employers and certain officers and agents. Most components of the law took immediate effect.

Employer Notice Requirement. Of particular importance to employers, the Wage Theft Law imposes a new written notice obligation. Upon publication by the Department of Labor and Workforce Development, employers must distribute to current employees a statement concerning their rights under New Jersey's wage and hour laws. This statement must also be provided to all new hires.

Statute of Limitations and Liquidated Damages. Under the Wage Theft Law, the statute of limitations for unpaid minimum wage and overtime claims increases from two to six years, both for actions initiated by the Commissioner of Labor in the Wage Collection Section and for civil actions.

In addition, employees may now obtain liquidated damages of up to two hundred percent of wages owed. Previously, liquidated damages were not available under New Jersey law for these types of claims.

The Wage Theft Law provides employers with a defense to liquidated damages in certain circumstances. In civil actions, employers may avoid liquidated damages for first violations by demonstrating that: (1) the act or omission leading to the violation "was an inadvertent error made in good faith;" (2) they had "reasonable grounds" for believing the act or omission was not a violation; (3) the employer acknowledges that they violated the law; and (4) they paid the amount owed within 30 days.

Additional Consequences for Failure to Maintain Proper Records. Employers that fail to produce the records required under the wage and hour laws face a rebuttable presumption that allegations concerning the period of time and number of hours relevant to an asserted violation are true. In criminal proceedings, the failure to present records creates an inference that the allegations are true, unless the employer can demonstrate good cause for the failure to present the records.

Anti-Retaliation Provisions. The amendments also bolstered New Jersey's anti-retaliation provisions. It is now a "disorderly persons offense" to take retaliatory action against an employee "by discharging or in any other manner discriminating against the employee" for, among other things, making a complaint, instituting an action, or informing another employee about their rights concerning wages and hours of work. The amendments implement a more expansive definition of retaliation, as the previous statute did not explicitly protect individuals who informed colleagues about their rights.

Moreover, there is a presumption of retaliation for actions taken within 90 days of an employee filing a complaint with the Commissioner or instituting an action in court. Whether actions against an employee constitute a disorderly persons offense, the fact that the actions occur within 90 days is considered "presumptive evidence." For civil claims, the presumption may be rebutted by "clear and convincing evidence that the action was taken for other, permissible, reasons."

Employers will be fined between $500 and $1,000 and/or imprisoned between 10 and 90 days for first violations. For second and subsequent violations, employers are subject to fines between $1,000 and $2,000 and/or imprisonment between 10 and 100 days.

Employers may be required to offer reinstatement or otherwise correct the discriminatory action, pay all wages lost due to the wrongful action, and pay liquidated damages of not more than 200%. For administrative proceedings, the Commissioner also may assess administrative penalties for retaliatory actions of up to $250 for a first violation and up to $500 for subsequent violations.

Enhanced Criminal Penalties—and Individual Liability. The amendments also expand the scope of disorderly persons offenses for failure to pay wages, compensation, or benefits. The amendments define "compensation and benefits" to include a longer list of benefits, such as "health benefits, pensions, medical treatment, disability compensation and workers' compensation, including death benefits to dependents of workers who have died as a result of their employment."

If an employer is found to have committed a disorderly persons offense, it must pay the employee the wages owed, 200% of that amount in liquidated damages, and reasonable costs. Guilty employers also will be fined $500 plus a penalty of 20% of the wages owed for a first offense. For subsequent offenses, they will owe $1,000 per offense plus the 20% penalty. Fines and penalties collected will be used towards enforcement and administration costs of the Division of Wage and Hour Compliance of the New Jersey Department of Labor and Workforce Development.

With regard to the definition of employer for purposes of the disorderly persons offense, "officers of a corporation and any agents having the management of that corporation shall be deemed to be the employers of the employees of the corporation." Excluded from the definition of employer for this purpose, however, are independent contractors, subcontractors, and employers and employees in the construction industry working under collective bargaining agreements.

The Crime of a "Pattern of Wage Nonpayment." Beyond the added penalties, the Wage Theft Law created a new crime. It provides that a person knowingly commits a crime of a pattern of wage nonpayment if they have been convicted of a violation of certain provisions of the Criminal Justice Code and/or wage and hour laws on two or more occasions. This offense is a third-degree crime; however, the presumption of non-imprisonment does not apply, and it does not merge with other convictions (meaning that a lesser included offense would not be absorbed into this conviction).

Expanded Joint and Successor Liabilities. In addition to the expanded corporate and individual criminal liability noted above, organizations may be held liable under the Wage Theft Law as joint or successor employers.

Under the statute, "client employers"1 and "labor contractors"2 are subject to joint and several liability for violations of state wage and hour laws, as well as certain criminal violations. For purposes of joint and several liability, "labor contractor" excludes "a bona fide labor organization or apprenticeship program, or a hiring hall operated pursuant to a collective bargaining agreement." Furthermore, any attempted waiver of these provisions is expressly against public policy and is void and unenforceable.

The Wage Theft Law also created a rebuttable presumption (and a low bar, at that) as to successor liability. There is a now rebuttable presumption that a successor entity is liable for the violations of the predecessor if only two of the following factors are shown: they (1) perform similar work within the same geographical area; (2) occupy the same premises; (3) have the same telephone or fax number; (4) have the same email address or Internet website; (5) employ substantially the same work force, administrative employees, or both; (6) utilize the same tools, facilities, or equipment; (7) employ or engage the services of any person or persons involved in the direction or control of the other; or (8) list substantially the same work experience.

Increased Authority of the Commissioner in Wage Collection Actions. Finally, the Wage Theft Law enhances the powers of the Commission in several ways.

With the amendments, the Commissioner's jurisdictional authority increases from $30,000 to $50,000. As a result, the Commissioner may take on claims asserting greater damages. Furthermore, employees may now recover for the full six-year period and liquidated damages up to 200% in wage collection proceedings. In addition to claims for unpaid wages, employees may also bring retaliation claims in wage collection proceedings.

If an employer fails to comply with a final determination of the Commissioner or a judgment from a court to pay wages or damages within 10 days of the time required, the Commissioner now may: (1) issue a written determination directing the appropriate agency to suspend one or more licenses held by the employer or any successor firm until they comply; and/or (2) issue a stop work order requiring cessation of all business activities. In the second instance, the employer must pay all employees for the first 10 days of the cessation of work.

Furthermore, upon conviction of the employer, the prosecutor or court shall inform the Commissioner, who may conduct an audit of the employer and any successor firm within 12 months. If during the course of an audit the commissioner discovers that the employer has failed to provide compensation, then the commissioner must initiate a wage claim on the employee's behalf.

The Wage Theft Law also requires the Commissioner to compile and "prominently place" on its website all final determinations and court judgments. This posting obligation will involve the public release of employer-specific information, including the name and address of an employer, the nature of the claim, the number of affected employees and wages owed, and any resulting findings, penalties, license suspensions/revocations.

Conclusion. Except for certain provisions setting forth the crime of a pattern of wage nonpayment, which go into effect on November 1, 2019, the law took effect when signed on August 6.

In light of these significant amendments, employers with operations in New Jersey should consider taking the following steps:

  • auditing their pay practices particularly in light of the increased minimum wage and the increase in potential liability;
  • confirming that all postings and policies are up to date;
  • reviewing recordkeeping practices; and
  • distributing the required notice upon publication, to all current and new employees.

Footnotes

1 A "client employer" is defined to include a "business entity . . . that obtains or is provided workers, directly from a labor contractor or indirectly from a subcontractor, to perform labor or services within its usual course of business."

2 Labor contractor means "any individual or entity that supplies, either with or without a contract, directly or indirectly, a client employer with workers to perform labor or services within the client employer's usual course of business."

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
Similar Articles
Relevancy Powered by MondaqAI
 
In association with
Related Topics
 
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
 
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions