New Jersey’s New Wage Theft Act – What Workers Need to Know to Protect Their Pay
New Jersey’s recently passed Wage Theft Act (WTA) now gives it one of the strongest wage-and-hour laws in the country — protecting the hard-earned overtime pay and other wages owed to workers in the state. This is a major improvement for employees in New Jersey, which has long lagged behind in wage-and-hour protections for workers.
“Today we are sending a strong message to employers who choose to steal wages: They will no longer be able to get away with these unfair and unethical practices in this state,” said the New Jersey Lt. Gov.
Because the New Jersey Wage Theft Act is significantly more favorable to workers than the federal Fair Labor Standards Act (FLSA), essentially doubling the potential liability employers can face under federal law, it will now enable lawyers who handle overtime wage claims to file more of these claims under state law — maximizing the recovery of back wages and damages for their clients.
Here Are the Key Points that Workers Need to Know About the Changes to NJ Labor Laws:
EMPLOYEES CAN RECOVER THREE TIMES THEIR BACK WAGES
- Under New Jersey’s revised labor laws, employees who prevail in their claim that an employer owes them back overtime or other wages or engaged in retaliation can recover the wages owed plus liquidated damages of up to 200 percent of the unpaid wages.
- In addition to three times back wages, employers may also have to pay the employee’s reasonable costs and attorney fees.
STATUTE OF LIMITATIONS IS NOW SIX YEARS INSTEAD OF TWO
- The time period in which back pay can be recovered (the statute of limitations) is increased from two years to six years. Workers who have been cheated out of overtime pay or other wages due can now assert claims seeking up to six years of unpaid wages.
STRONG ANTI-RETALIATION PROVISIONS
- Retaliation is presumed if the employer fires or takes an adverse action against an employee within 90 days of any conduct protected under the law. The presumption may be overcome only by “clear and convincing evidence” (a very high level of proof) that the alleged retaliatory action was taken for permissible reasons. Employers must offer reinstatement to the discharged employee or take other action as needed to remediate the retaliation.
JOINT AND SEVERAL LIABILITY
- Businesses can be held responsible for wage violations committed by contractors they hire. Client-employers and labor contractors can all be held jointly responsible for any wage violations under NJ state law, including unlawful retaliation.
In addition, the WTA establishes harsher criminal penalties for employers who violate the labor laws. Employers who knowingly fail to pay an employee the full amount of wages agreed to or required by law within thirty days of the date due; or who retaliate against an employee for making an internal or external complaint, participating in a proceeding relating to wage payment laws; or because the employee has informed another employee about wage-and-hour rights under state law, violate the Wage Payment Law and face penalties:
- First Violation — fine of $500 to $1,000, imprisonment of 10 to 100 days, or both.
- Second Violation — fine of $1,000 to $2,000, imprisonment of 10 to 100 days, or both.
- Third and Subsequent Violations — the employer is guilty of a crime of the fourth degree and faces a fine of $2,000 to $10,000, imprisonment of up to 18 months, or both.
The new law does, however, provide employers who are first-time offenders the opportunity to avoid liquidated damages entirely if they can show that 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[.]” To benefit from such protection, the employer must admit to a violation and pay the full amount owed within 30 days of notice of the violation.
The WTA also lays out factors for determining a rebuttable presumption of successor liability in claims before the NJ Workforce Development’s Wage Collection Section (WCS). While it is still not entirely clear as to whether this will apply to claims brought in the courts, the WTA states that “an employer has established a successor entity” if the predecessor and alleged successor share at least two of the following factors:
- Perform similar work within the same geographical area.
- Occupy the same premises.
- Have the same telephone or fax number.
- Have the same email address or Internet website.
- Employ substantially the same work force, administrative employees, or both.
- Utilize the same tools, facilities, or equipment.
- Employ or engage the services of any person or persons involved in the direction or control of the other.
- List substantially the same work experience.
Successor liability is important to workers because it prevents dishonest employers from attempting to escape payment by creating a new business, with a new name, and shifting assets and operations to it — leaving the prior business as a worthless shell that is unable to pay workers’ wage claims and penalties. Shady employers can run, but this makes it much harder for them to “hide.”
This new law was many years in the making and overcame significant hurdles, including a veto by former Republican Gov. Christie in early 2018 shortly before he left office. Even now, the law barely passed — with no Republicans voting in favor of the new wage law.
How Much Could I Be Owed in Back Overtime Pay? Probably More Than You Think
Due to the triple damages and six-year limitations period, workers may be surprised by how much they may be owed in back overtime pay and “liquidated damages.” Our overtime pay calculator makes it a bit easier to get an idea of the amounts potentially at stake. Please note that the calculator is based on federal overtime pay law, so results only include double damages and a maximum of three years recovery.