The New Jersey Wage and Hour Law (N.J.S.A. 34:11-56a, et seq.) sets forth the rules employers must follow in paying overtime, the minimum wage, classifying workers, and more. In 2019, the legislature amended the wage and hour law, and a related statute, the New Jersey Wage Payment Law (N.J.S.A. 34:11-4.1 et seq.). The amendments increased the penalties for violations of the laws. They further lengthened the statute of limitations for suing violators.
As a result, employers must be diligent in their payroll procedures and practices. The experienced New Jersey Wage and Hour attorneys at Schiller, Pittenger & Galvin, P.C., can assist employers who find themselves in disputes with employees, former employees or the Department of Labor and Workforce Development.
What Does the New Jersey Wage and Hour Law Require Employers Do?
The Wage and Hour Law has several provisions which employers must follow:
Payment of overtime
The Wage and Hour Law states that “non-exempt” employees must be paid overtime for any work performed over 40 hours in the workweek. This does not mean an employee can receive paid overtime for working on a weekend or over eight hours on a particular day. Rather, overtime hours accrue after an employee has worked 40 hours in a particular week.
The law requires the overtime hourly rate to be 150% of the standard hourly rare (“time and a half”). Non-exempt workers who are eligible for overtime need not be hourly workers. For example, workers who are paid a salary or who work on commission may be entitled to overtime. In that instance, the employer must calculate the hourly rate at which the employee is being paid. The employee is then entitled to payment of 150% of that rate for the hours the employee worked over 40 in a given workweek.
Non-exempt versus exempt workers
Exempt workers are workers who are not entitled to be paid overtime wages.
There are three broad categories of workers who are not eligible for overtime pay. Workers who are considered executives, administrative workers or professionals are not eligible for overtime pay if they work over 40 hours in a workweek.
Both federal labor law and the wage and hour law recognize the distinction between exempt and non-exempt employees. However, an employer must do more than simply label an employee an “executive.” For instance, an executive must be a person who supervises at least two other employees. The executive’s job must be in management. That person is paid a salary, not an hourly rate. The executive has hiring and firing power and exercises discretion in performing his/her duties.
To be considered an administrative worker, the employee must work with executives or other administrative workers. The employee must not perform non-administrative duties over 20% of the employee’s work time. The employer pays the employee a salary. The employee works in an office. Lastly, the nature of the work must be administrative and/or relate the general business operations of the company.
In order to be considered a professional, the employee must be highly educated and have an intellectually challenging job or one that requires artistic creativity. The employee must exercise significant discretion and receive a salary. As with an administrative employee, the professional employee must not spend over 20% of her work on other work functions.
There are several other types of employees who the Wage and Hour Laws deem as exempt. Most minors, summer non-profit camp workers and some healthcare workers are exempt employees. Also, employers do not have to pay outside salespeople and independent contractors overtime.
Employers are required to pay most workers the state-mandated minimum wage.
Employers do not have to pay certain employees the minimum wage. Those employees include students working for their college, auto salespeople, outside salespeople, and babysitters working in the home of the employer-parent.
Additionally, exempt employees are not eligible to receive the minimum wage.
As of January 1, 2022, New Jersey’s minimum wage is $13 per hour.
Misclassification of employees
Employers have to be careful whether they classify their employees as exempt, non-exempt or independent contractors. Misclassification of an employee as being exempt from minimum wage or overtime protection would be viewed as a violation of the Wage and Hour Law. Likewise, labelling an employee an independent contractor would violate the law.
Experienced New Jersey Wage and Hour Law attorneys can help employers set up procedures to ensure employers properly classify their employees.
Retaliation Against Employees
The Wage and Hour Law prohibits employers from taking retaliatory actions against employees who report violations to the employer, their union or the government.
Employers Must Provide All Employees with a Notice Advising Them of the Rights Under the Wage and Hour Law
Employers must provide all existing and new employees a notice about the Wage and Hour Law. The notice advises employees of their rights regarding overtime and the minimum wage. It also has the address and phone number for the Department of Labor.
Penalties for Wage and Hour Law Violations
The 2019 amendment to the Wage and Hour Law increased for violations of the statute. Employers who fail to pay wages or retaliate against an employee are charged with a disorderly persons offense. For first-time offenders, the fine is $500 to $1,000. The penalty can also include 10 to 90 days in jail.
For a second offense, the fine increases to $1,000 to $2,000. A judge can jail the employer for 10 to 100 days.
For each week that pay is improperly withheld, the state can charge a separate offense.
The state will also charge a penalty of 20% of the wages withheld.
The law also prohibits a “pattern of wage non-payment.” A pattern of wage non-payment can occur if the employer commits two or more wage law violations. It is a third-degree crime. If convicted, the employer can face three to five years in jail and a fine up to $15,000.
An Employee-Victim Can file a Claim with the Department of Labor and Workforce Development or Sue in Court
An aggrieved employee can file a claim with the Department of Labor for wage violations or retaliatory actions by the employer.
Alternatively, the employee can sue in state court. Under the Wage and Hour Law, the employer can be liable for back pay, attorneys’ fees and costs. Additionally, the jury can award the employee liquidated damages of 200% of the withheld wages.
If this was a first offense, the employer can assert a defense against the liquidated damages claim. The employer can argue that he acted in good faith, acted inadvertently and/or had a reasonable belief he did not owe the back wages.
However, in order to assert this defense, the employer has to acknowledge that he violated the law. Also, the employer had to have paid the back wages to the employee within 30 days of getting notice of the wage violation.
In a retaliation claim, there is a rebuttable presumption the employer retaliated if the employer takes any adverse action against the employee within 90 days of receiving notice of the employee’s wage complaint.
Statute of Limitations
There is a six-year statute of limitations for wage and hour claims. Therefore, employees who believe their wages were improperly withheld, or were retaliated against, must file a claim or lawsuit within six years of the employer’s unlawful actions.
Experienced New Jersey Hour and Wage Law Lawyers
Employers now face significant potential penalties for violations of the Wage and Hour Law. The New Jersey Wage and Hour Law attorneys at Schiller, Pittenger & Galvin, P.C., can assist employers review their payroll practices and employee classifications to ensure compliance with New Jersey’s wage laws. They can also advise supervisors, HP staff and hiring persons of the wage law’s requirements for employers. Call the Wage and Hour Law attorneys at the firm’s Scotch Plains office at 908-490-0444 or contact them here.