Warning for Employers in New Jersey as the State passes the new ‘Wage Theft Law’

Warning for Employers in New Jersey as the State passes the new ‘Wage Theft Law’

The state of New Jersey has struck the rules for employers by amending the state’s Wage and Hour Law (N.J.S.A. 34:11-56a, et seq.), Wage Payment Law (N.J.S.A. 34:11-4.1, et seq.) and Wage Collection Law (N.J.S.A. 34:11-57, et seq.). The acting Governor Sheila Oliver signed the New Jersey Wage Theft Act (“WTA”), Senate, No. 1790 on August 6, 2019 into law.

The new law provides stricter rules by radically increasing the liabilities, damages, penalties and remedies against the employer who would mischievously disobey the law for not remunerating their employees.

The amended Act has increased the statute of limitations for claims from two years to six years (amendment to R.S.34:11-58), wherein, if an employer who violates the law, will have to pay the full amount of any wages due, liquidated damages equal to 200 percent of the wages due, costs, as well as attorney’s fees.

First time offenders have a defense available for the imposition of liquidated damages (amendment to Section 10 of P.L.1965, c.173 (C.34:11-4.10)), only when the employer is able to show that the error has happened in good faith, he has not violated the law and has agreed to pay the employee the amount due from his part within 30 days from the notice of violation received.

The employee has all the right to recover all lost wages, liquidated damages, costs, and attorney’s fees if an employer is found guilty of taking any personal revenge from employee. Any adverse action taken against an employee within 90 days of his filing a claim will be presumed to constitute unlawful retaliation. (Amendment to Section 26 of P.L.1966, c.113 (C.34:11-56a25)). Employers are prohibited to discriminate or retaliate against their employees under the WTA.

The new law has increased the jurisdictional limit in the Wage Collection Division from $30,000 to $50,000. (Amendment to R.S.34:11-58). It also mentions that an employer’s failure to provide employee’s records necessitated by the law, shall automatically give way to a rebuttal presumption that the employee alleged claim is accurate or proper for his/her worked time and wages. Id.

One of the most substantial changes by the WTA is the possible liability of employers who use contractors. Both an employer and labor contractor who provides workers to employers are bound to share a legal responsibility of discrimination or violation of the state’s wage and hour laws. (New section [10] 9 (a)). This includes not only the payment of wages but any retaliatory actions taken against an employee.

The Act also mentions about the possible civil and criminal penalties for wage theft offenders. The employer who fails to pay fair wages to an employee or a first time offender shall be liable for a fine of $500 to $1,000, along with imprisonment of 10 to 90 days. Second offenders shall be liable to fines of $1,000 to $2,000 and possible jail time of 10 to 100 days. (Amendment to Section 10 of P.L.1965, c.173 (C.34:11-4.10)).

From now on, a notice of employee rights under the law that is yet to be released by the Department of Labor, will be made available to all the newly hired or current employees. (New section [12] 11 (c))

With this sudden change in employment law, the number of claims and lawsuits is guaranteed to increase. This calls for employers to be more cautious or watchful for their pay practice. They should also be heedful for their recordkeeping practice and in their dealings with contractors to avoid claims under this strict new law.