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Are You Prepared to Comply with New Jersey’s New Wage Theft Law?

Author: Scarinci Hollenbeck, LLC

Date: October 18, 2019

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New Jersey’s New Wage Theft Law is Among the Most Comprehensive in the Country…

New Jersey’s new wage theft law is among the most comprehensive in the country. It can also lead to significant liability, even for well-intentioned employers. To avoid missteps, employers should immediately review their wage practices and procedures.

Are You Prepared to Comply with New Jersey’s New Wage Theft Law?

New Jersey Wage Theft Act

Acting Governor Sheila Oliver signed the New Jersey Wage Theft Act (WTA) into law on August 6, 2019. The WTA extends the statute of limitations for unpaid minimum wage and overtime claims from two to six years. The new statute of limitations applies to enforcement actions initiated by the Commissioner of the New Jersey Department of Labor and Workforce Development (NJDOL Commissioner) as well as civil suits.

The WTA also extends the remedies provided to employees by the minimum wage law in cases of employer retaliation to cover employer retaliation under the wage payment law. In addition, it provides the same opportunity for workers aggrieved by violations of the wage payment law to bring a civil action as workers are provided for violations of the minimum wage law.

Liquidated Damages

Under the WTA, an employer found to owe wages must pay the employee the wages owed plus liquidated damages equal to 200 percent of the owed wages. The payment of liquidated damages is not required for a first violation if the employer shows to the satisfaction of the court that the act or omission constituting the violation was an “inadvertent error made in good faith” and that the employer had reasonable grounds for believing that the act or omission was not a violation. The employer must also acknowledge that the employer violated the law and must pay the amount owed within 30 days of notice of the violation.

Record Requirements

If an employer fails to provide required employee records under the State’s wage and hour laws, there is now a rebuttable presumption that the employer owes the amount of wages alleged. It is then up to the employers to show “good cause” for the failure to provide such records. While good cause is not expressly defined, the WTA does state that the rebuttable presumption does not apply if the employer can demonstrate that a natural disaster is responsible for the lack of sufficient records.

Anti-Retaliation Provisions

The WTA also establishes a rebuttable presumption of retaliation if the employer takes an adverse action against an employee within 90 days of any conduct protected under the State wage and hour laws. An employer may overcome the presumption by providing “clear and convincing evidence” that the employer took the alleged retaliatory action for permissible reasons. An employer who is found to have retaliated against an employee for bringing a claim under the statute commits a disorderly persons offense and is liable to the employee for wages lost because of the retaliation plus damages equal to not more than 200 percent of those wages.

Criminal Penalties for Wage Violations

Employers who fail to pay wages in compliance with the law now face criminal penalties. Under the WTA, an employer found to have violated the law is punishable by a fine of not less than $500 nor more than $1,000 or by imprisonment for not less than 10 nor more than 90 days or by both the fine and imprisonment. Upon conviction for a second or subsequent violation, an employer is punishable by a fine of not less than $1,000 nor more than $2,000 or by imprisonment for not less than 10 nor more than 100 days or by both the fine and imprisonment.

The WTA also criminalizes a “pattern of wage non-payment.” The new crime occurs when an employer knowingly violates, for a third or subsequent time, a range of specified laws regarding wage payment, minimum wage, and theft when the property stolen is unpaid wages. The crime of pattern of wage non-payment is classified as a crime of the third degree.  A crime of the third degree is ordinarily punishable by a term of imprisonment of three to five years or a fine of up to $15,000, or both.

Audits and License Suspensions

Upon issuing a decision finding wages due to a worker are equal to or greater than $5,000, the Commissioner must inform the employer that the NJDOL will conduct an audit of the employer or any successor firm of the employer and notify the Division of Taxation of the decision and recommend that the division conduct an audit of the employer to ensure the proper withholding and payment of payroll and other taxes.

When the NJDOL finds that employers failed to maintain required records and make required tax, benefit and wage payments, it must conduct audits and suspend or revoke business licenses of employers who are found to have continued the violations. In addition, the WTA provides that if an employer fails to comply with a final determination of the Commissioner or a court judgement to pay wages owed or related damages within 10 days, the Commissioner may order license suspensions, or issue a stop work order, until the failure is corrected.

Notification Requirements

The WTA requires employers to provide current and newly-hired employees a written copy of a statement, which will be provided by the NJDOL, notifying employees of their rights under the statute, with an explanation of how to file a claim or take other actions with regard to wage violations. The WTA also requires the Commissioner, in consultation with the Administrative Director of the Courts and the Attorney General, to produce an annual report on the enforcement of wage and hour laws with recommendations to improve enforcement. It must also publish website information regarding each wage claim in which an employer was found to have been in violation of one or more State wage and hour laws during the preceding period of not less than 12 months.

Next Steps for New Jersey Employers

The new law will certainly result in an uptick of wage and hour claims against New Jersey employers. To help ensure you are prepared to defend any such claims, we advise employers to thoroughly audit their pay policies and procedures to ensure compliance. Under the new law, even inadvertent wage-and-hour violations can lead to serious consequences.

If you have questions, please contact us

If you have any questions or if you would like to discuss the matter further, please contact me, Jorge R. de Armas or the Scarinci Hollenbeck attorney with whom you work, at 201-896-4100.

No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.

Scarinci Hollenbeck, LLC, LLC

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