Earlier this month New Jersey enacted the comprehensive Anti-Wage Theft Law (the “Act”), which amends certain critical provisions in New Jersey’s existing Wage Payment Law, the Wage Collection Law, and the Wage and Hour Law (the “Wage Laws”). The Act expands the scope of liability for employers by increasing the damages that are obtainable to an aggrieved employee, enlarging the causes of action that are available, and extending the statute of limitations from two years to six years. Overall, the Act furthers the current administration’s goal of expanding employee protections and creates more liability exposure for an employer who is not keeping abreast of the constant flux of the employment law landscape.
The Act amends the Wage Laws as follows:
Inference of Liability For Failing to Maintain Payroll Records. An employer who fails to produce all payroll records required to be maintained by law is now subject to a rebuttable presumption that the alleged aggrieved employee: (i) was employed during the time period alleged in the complaint; and (ii) is due the amount alleged to be owed in the complaint. In essence, this provision shifts the burden on the employer to disprove the employee’s claims.
A Liquidated Damage Provision in the Wage Payment Law. Prior to the Act, a violation of the Wage Payment Law resulted in the repayment of the wages owed to the employee – no other damages were available. Now, however, the Wage Payment Law includes a liquidated damage provision in an amount equal to 200% of the unpaid wages, plus reasonable costs and attorneys’ fees. The Act does provide for a good faith defense to nullify the liquidated damage provision for a first violation if the employer can demonstrate that the action taken was in good faith and upon reasonable grounds that it was not in violation of the law, and the employer pays the wages owed within 30 days and admits that it violated the Wage Payment Law.
Anti-Retaliation Provisions. The Act makes it a disorderly persons offense to engage in any retaliation against an employee who files a complaint, institutes an action, or even informs another employee about their rights under the Wage Laws. The Act creates a presumption of retaliation if there is an adverse employment action taken within 90 days of an employee filing a complaint with the Commissioner of Labor or instituting an action in court. If the adverse action was termination, an employer may be required to reinstate the employee and pay the employee for all wages lost during the wrongful discharge along with paying liquidated damages in an amount of 200% of the wages lost.
The Act further provides that employers who are found to have retaliated against an employee are subject to: (i) a fine between $500 and $1000 and/or imprisonment between 10 and 90 days for the first violation; and (ii) a fine between $1,000 and $2,000 and/or imprisonment between 10 and 100 days for any subsequent violation.
Criminal Penalties. It is now a disorderly persons offense if an employer fails to pay an employee his/her wages, compensation, or benefits. This liability extends to the agents of the employer, thus creating personal liability. If an employer is found guilty of a disorderly persons offense, it must pay all wages owed, plus liquidated damages equal to 200% of the wages. In addition, a disorderly persons offense comes with a statutory penalty of 20% of the wages owed plus $500 for the first offense, with those penalties increasing to 20% of the wages owed plus $1,000 for every subsequent offense.
The Crime of Pattern of Wage Nonpayment. The Act further creates a new crime for employers found to have “knowingly” committed a violation of the Wage Laws on two or more occasions. The offense is a third-degree crime.
Finally, and importantly, the Act requires employers to provide all current and newly hired employees with a written copy of a notice to be produced by the New Jersey Department of Labor concerning an employee’s rights under the Wage Laws. The New Jersey Department of Labor will post the notice on its website and advise employers how soon thereafter it must be distributed.
The vast majority of the amendments under the Act became effective immediately, the only exception being the criminal aspects of the amendments, which become effective on November 1, 2019.
It is crucial that New Jersey employers review their wage and payroll procedures to ensure full compliance.
As the law continues to evolve on these matters, please note that this article is current as of date and time of publication and may not reflect subsequent developments. The content and interpretation of the issues addressed herein is subject to change. Cole Schotz P.C. disclaims any and all liability with respect to actions taken or not taken based on any or all of the contents of this publication to the fullest extent permitted by law. This is for general informational purposes and does not constitute legal advice or create an attorney-client relationship. Do not act or refrain from acting upon the information contained in this publication without obtaining legal, financial and tax advice. For further information, please do not hesitate to reach out to your firm contact or to any of the attorneys listed in this publication.