Newark, N.J. (March 2, 2022) - 2021 was another busy year for both the legislature and the courts in the Garden State. Highlights of the biggest employment law changes are summarized below.
Amendment to Law Against Discrimination
New Jersey amended its Law Against Discrimination (LAD) and paved the way for new protections for those aged 70 and older. Designed to enable workers to retire on their own terms, the new law removed provisions of the LAD that had previously allowed employers to refuse to hire or promote those aged 70 and older. The new law also eliminated the ability of certain employers - namely in higher education and government - to require employee retirement at 70. Now, an employee who can prove they were unlawfully required to retire is also afforded all remedies provided by the LAD, whereas previously such an employee had been limited to recovery of only backpay and interest. Mandatory retirement provisions remain permissible as to any employee who is employed in a bona fide executive or a high policy-making position for the two-year period immediately before retirement, if that employee is entitled to an immediate, non-forfeitable annual retirement benefit from a pension, profit sharing, savings, or deferred retirement plan, or any combination of those plans, from their employer that equals at least $27,000 in the aggregate.
Amendment to New Jersey's WARN Act
The New Jersey WARN Act, an expansive business closing and mass layoff notification law, was also amended to impose mandatory severance pay to affected employees, equal to one week of pay for each full year of employment. Employers must provide 90 days' notice of a mass layoff, transfer, or termination of operations to all affected employees. Failure to do so will entitle employees to four additional weeks of severance pay. The amendment broadened the definition of "mass layoff" to include termination of 50 or more employees at any establishment during a 30-day period, and "establishment" now consists of all New Jersey facilities operated by any employer in the aggregate.
Recreational Marijuana Use
New Jersey also legalized the adult use and possession of recreational marijuana. Employers are now prohibited from discriminating against medical or recreational marijuana use in hiring, or taking an adverse employment action against an employee who tests positive for marijuana, even for positions related to safety. Employers can, however, take adverse action if the employee's positive marijuana test is followed by a physical evaluation by a certified Workplace Impairment Recognition Expert, who must be certified in detecting marijuana for workplace incident investigations. If a certified expert detects marijuana using a scientifically valid, objective, and reliable drug test (such as blood, saliva, or urine samples), the employer may take adverse action against the tested employee. Employers are not required to accommodate the medical use or permit the recreational use of marijuana in the workplace. However, employers are permitted to require that their workplaces remain drug-free and alcohol-free despite the new laws.
Misclassification of Independent Contractors
Governor Phil Murphy signed new bills into law that facilitate the state's identification of employers who misclassify employees as independent contractors. The laws also make it easier for the state to penalize employers for instances of misclassification, and authorize the Commissioner of Labor and Workforce Development to issue stop work orders for businesses in violation of wage, benefit, and tax laws. Additionally, misclassification of employees done with the purpose of avoiding insurance premium payments is now a violation of the New Jersey Fraud Prevention Act that may subject employers to fines from $5,000 to $15,000 per violation.
Arbitration Agreements and Law Against Discrimination
The LAD's ban on the use of pre-employment arbitration agreements has been held to be unenforceable as inconsistent with the Federal Arbitration Act, which preempts the LAD. The United States District Court for the District of New Jersey issued a permanent injunction preventing the New Jersey Attorney General from enforcing the ban. N.J. Civil Justice Inst. v. Grewal, 2021 U.S. Dist. LEXIS 57437.
Personal Injury Actions for Failure to Accommodate
Finally, the New Jersey Supreme Court issued a landmark decision in Mary Richter v. Oakland Board of Education, 246 N.J. 507, 252 A.3d 161. It held that plaintiffs can pursue personal injury damages originating from an employer's failure to accommodate a disability. Marking a major change from the many decisions holding that personal injury damages are not recoverable for failure to accommodate claims under the Americans with Disabilities Act, the decision also clarified that a plaintiff need not prove an adverse employment action by an employer in order to make out a prima facie case of failure to accommodate under the LAD.
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