On August 6, 2019, Acting Governor Sheila Oliver signed into law the New Jersey Wage Theft Act (“WTA”), which amended state wage and hour and wage collection laws.
The new law dramatically increases the remedies, damages, penalties, and other liabilities for employers who fail to pay their employees according to law.
More Significant Aspects of the WTA
- The statute of limitations for claims under New Jersey’s wage and hour laws increased from two years to six years. An employer who fails to pay wages to an employee and who is found liable for violating these laws must pay the full amount of any wages due, liquidated damages equal to 200 percent of the wages due, costs, and attorney’s fees.
- There is a defense to the imposition of liquidated damages for first time offenders, if the employer can show that the violation was an inadvertent error made in good faith, the employer had reasonable grounds to believe there was no legal violation, and the employer agrees to pay the amount due to the employee within 30 days of receiving notice of the violation.
- The WTA prohibits retaliating against an employee by discharging or otherwise discriminating against them for making a complaint to the employer or to the Department of Labor that they have not been paid the wages due to them, for instituting a claim pursuant to the law, or for testifying in any proceeding brought pursuant to the law If an employer is found guilty of retaliation, the WTA provides for mandatory reinstatement of any discharged employee and the right for the employee to recover all lost wages, liquidated damages, costs, and attorney’s fees. Any adverse action taken against an employee within 90 days of their filing a claim will be presumed to constitute unlawful retaliation.
- The jurisdictional limit in the Wage Collection Division is increased from $30,000 to $50,000. If an employer fails to provide employee records required by the law, a rebuttable presumption arises that the employee worked for the time and for wages alleged in their claim.
- One of the most significant changes created by the WTA is the possible liability for employers who use contractors. An employer and a labor contractor who provides workers to the employer are subject to joint and several liability and will share civil legal responsibility for any violations of the state’s wage and hour laws. This includes not only the payment of wages but any retaliatory actions taken against an employee. So if you use contract employees, any violation of the WTA by their employer will now be your responsibility too.
- The WTA also provides for possible civil and criminal penalties. Any employer (which by definition includes any corporate officer or managing agent) who fails to pay wages due to an employee or who retaliates against an employee for reasons protected by the WTA is guilty of a disorderly person’s offense. For first offenders, fines of $500 to $1,000 may be imposed, along with imprisonment of 10 to 90 days. Second offenders are subject to fines of $1,000 to $2,000 and possible jail time of 10 to 100 days.
- The Department of Labor is in the process of preparing a notice of employee rights under the law, which must be provided to all newly hired and current employees.
The WTA has dramatically changed the legal landscape in New Jersey regarding state wage and hour claims. Given the increase in damages and remedies provided by the WTA, the number of claims and lawsuits is guaranteed to increase.
Employers need to audit their pay practices, review their recordkeeping procedures, and be vigilant in their dealings with contractors to avoid claims under this expansive new law.
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