New Jersey Toughens Wage and Hour Laws
On August 6, 2019, Acting Governor Sheila Oliver signed into law Senate Bill 1790 (“S1790”), which significantly increases penalties for employers that fail to pay wages to their employees and expands other provisions of New Jersey’s wage and hour laws. All of the provisions of S1790 outlined below became effective immediately.
New Penalties under the Wage Payment Law and Wage and Hour Law
S1790 enhances the penalties that can been imposed on employers that “knowingly and willfully” fail to pay wages due under the New Jersey Wage Payment Law, N.J.S.A. 34:11-4.1 et seq. (“WPL”), or who take retaliatory actions against employees who have engaged in protected conduct under the WPL or the New Jersey Wage and Hour Law, N.J.S.A. 34:11-56a et seq. (“WHL”). Of particular significance, S1790 defines employers to include individuals as well as entities.
Protected conduct includes:
- Making an internal complaint regarding unpaid wages;
- Filing a complaint with the Commissioner of the New Jersey Department of Labor and Workforce Development;
- Filing a lawsuit under the WPL or WHL;
- Testifying in any proceeding under the WPL or WHL; or
- Informing employees about their rights under state wage and hour laws.1
The new penalties include:
- A minimum fine of $500 and/or imprisonment for ten (10) to ninety (90) days for a first violation;
- A minimum fine of $1,000 and/or imprisonment for ten (10) to one-hundred (100) days for a second violation; and
- A minimum fine of $2,000 and/or imprisonment for eighteen (18) months for any subsequent violation.
Each week in which a violation of the WPL occurs constitutes a separate and distinct offense.
New Damages for Employees under Wage Payment Law and Wage and Hour Law
S1790 also amends the WPL and the WHL by allowing employees who successfully bring claims under either statute for unpaid wages to recover:
- Any unpaid or lost wages due;
- Liquidated damages of up to 200 percent of the wages due;
- Reasonable costs of the legal action and attorneys' fees.
Employers also are required to offer reinstatement to an employee who is discharged in retaliation for engaging in protected conduct.
Liquidated damages are not due to an employee for a first violation if the employer shows to the satisfaction of the court:
- The act or omission constituting the violation was an inadvertent error made in good faith;
- The employer had reasonable grounds for believing that the act or omission was not a violation;
- The employer acknowledges that the employer violated the law; and
- The employer pays the amount owed within thirty (30) days of receiving notice of the violation.
S1790 also significantly increases the statute of limitations for actions under the wage and hour laws from two years to six years.
Presumption of Retaliation
There is now a rebuttable presumption of retaliation when any employer takes an “adverse action” against an employee within ninety (90) days of the employee bringing a claim under the WHL or the WPL. The presumption can only be rebutted if the employer can present “clear and convincing evidence that the action was taken for other, permissible, reasons[.]”
Increased Investigatory Powers
S1790 also increases the investigatory powers of the Commissioner of the New Jersey Department of Labor and Workforce Development (“the Commissioner”). The Commissioner can investigate any wage claim of up to $50,000 (previously, the limit was $30,000). Additionally, if during an investigation it is determined that an employer owes wages greater than $5,000 dollars, the Commissioner can conduct an audit of the employer and report the employer to the Division of Taxation for a potential audit.
During an investigation of an unpaid wage claim, if an employer cannot produce the records “required to be kept under any State wage and hour laws, there shall be a rebuttable presumption that the employee worked for the employer for the period of time and for the amount of wages as alleged in the wage claim.”
All of the provisions of S1790 listed above went into effect immediately. Accordingly, employers should be aware of the possibility of enhanced penalties for wage and hour violations in New Jersey. Employers also should take note of the new presumptions added by S1790, including the presumption of retaliation and the presumption regarding record keeping. The new presumptions, as well as the far longer six year statute of limitations, certainly provide an incentive for New Jersey employers to take a look at their recordkeeping practices and make any necessary changes. New Jersey employers also should carefully review any terminations of employees who may have brought a claim under the WPL or WHL given the clear and convincing evidence they are required to muster to avoid the presumption of retaliation.
1Protected conduct under the WHL also includes serving on a “wage board[.]”