Acting New Jersey Governor Sheila Oliver recently signed into law bill A-2903/S-1790, which includes sweeping changes to New Jersey civil and criminal provisions related to the payment of wages, including increased penalties and fines. A summary of the key provisions of this law is below.
First, the law amends the Wage Payment Law, Equal Pay Act, and the N.J. State Wage and Hour Law, such that if an employer owes unpaid wages or wages lost due to retaliation, the employee is allowed to recover not only the wages owed but also liquidated damages equal to 200 percent of the unpaid wages, plus reasonable costs and attorney’s fees. The law provides that an employer may avoid liquidated damages for its first violation if the employer establishes that its action was taken in good faith, with a reasonable basis to believe that its action was not a violation, and the employer admits the violation and pays the amount owed within 30 days.
Second, the law triples the applicable statute of limitations. Specifically, the law extends the limitations period for a wage recovery action from two to six years.
Third, the law broadens the definition of “employer” to include successor entities such that successor entities may be liable for wage violations of their predecessors. Also, where an employer fails to pay employees pursuant to a contract, both the employer and labor contractor providing workers to the employer shall be jointly and severally liable for any wage and hour violations.
Fourth, the law amends the violations provision of the Wage Payment Law such that a violation will be found if the employer knowingly fails to pay the full amount of wages it agreed to pay, or was required to pay by law, or where the employer retaliates against an employee in any manner, including discharge, because: (1) the employee made a complaint regarding the failure to pay wages to the employee’s employer, the commissioner, or the employee’s authorized representative; (2) the employee has caused to be instituted or is about to cause to be instituted any proceeding under the law; or (3) the employee testified or is about to testify in any proceeding under or relating to the law. In addition, an employer who retaliates against an employee for informing other employees of their rights under New Jersey wage laws also commits a violation.
The law institutes an additional remedy where an employee suffers an adverse action, such as discharge, in violation of the Wage Payment Law, the Wage and Hour Law, or a contract to pay employees. Specifically, employers must offer reinstatement to the employee and/or take other actions needed to correct the retaliatory action. In addition, an employer taking adverse action within 90 days of the employee’s protected activity creates a rebuttable presumption that the employer’s action was retaliatory. This presumption may be rebutted only by clear and convincing evidence that the action was taken for other, permissible, reasons.
In addition to recovery of wages and damages as described above, an employer that is guilty of a first violation shall also be guilty of a disorderly persons offense and subject to a fine of $500 to $1,000, or to imprisonment for 10 to 90 days, or to both the fine and imprisonment. An employer who commits a second violation shall be guilty of a disorderly persons offense and shall be punished by a fine of $1,000 to $2,000, or by imprisonment of 10 to 100 days, or by both the fine and imprisonment. Employers committing a third or subsequent violation are guilty of a crime of the fourth degree, and can be punished by a fine of $2,000 to $10,000, or by imprisonment of up to 18 months, or by both the fine and imprisonment. Each week in which a violation of the Wage Payment Law occurs shall constitute a separate and distinct offense.
Finally, the law amends the New Jersey Code of Criminal Justice, now stating that it is a disorderly persons offense if an employer that has agreed with an employee to pay wages, compensation, or benefits, fails to pay wages when due or fails to pay compensation as required by law within 30 days. Violations result in the imposition of a fine of $500, plus a penalty equal to 20 percent of the wages owed for a first offense, with subsequent violations resulting in a fine of $1,000 plus a penalty of 20 percent of wages owed. Employers convicted of violating the law on two or more occasions are guilty of the crime of “pattern of wage nonpayment,” a crime in the third degree.
These broad changes to New Jersey’s wage payment laws take effect immediately, with the exception of the crime of pattern of nonpayment of wages, which takes effect on November 1, 2019. Employers should review their wage payment policies to make sure they are in compliance so as to avoid these increased penalties.